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What changed in CervoMed Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CervoMed Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+1000 added−985 removedSource: 10-K (2026-03-13) vs 10-K (2025-03-17)

Top changes in CervoMed Inc.'s 2025 10-K

1000 paragraphs added · 985 removed · 808 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

205 edited+106 added−97 removed191 unchanged
Biggest changeThe specialty nature of neflamapimod, if approved, combined with the prevalence of the disease should present a significant commercial opportunity, including through reimbursement, based on the impact on patients’ quality of life and ability to function, reduction of caregiver burden and reduction of health care costs associated with DLB, among other factors. ● Neflamapimod has the potential to improve cognitive and motor function (i.e., restore function), providing the opportunity to expedite the later stages of clinical development in DLB without AD co-pathology relative to other chronic neurodegenerative diseases.
Biggest changeWe believe, if approved, the nature of neflamapimod’s mechanism of action, combined with the nature and prevalence of these diseases, could significantly improve patients’ quality of life and ability to function, reduce caregiver burden and systemic health care costs, and present a significant commercial opportunity in one or more indications. ● Advance clinical development of neflamapimod as a potential first-in-class treatment for DLB without AD co-pathology, including securing sufficient funding and initiating our planned Phase 3 trial in the second half of 2026, subject to available funding.
We believe that inhibiting p38α activity in the brain, by interfering with key pathogenic drivers of disease, has the potential to reverse the clinical progression observed in the early-stages of certain neurodegenerative diseases, as well as slow further progression by delaying permanent synaptic dysfunction and neuron death.
We believe that inhibiting p38α activity in the brain has the potential to reverse the clinical progression observed in the early stages of certain neurodegenerative diseases, as well as slow further progression by delaying permanent synaptic dysfunction and neuron death, by interfering with key pathogenic drivers of disease.
The CDR-SB is designed to assess both cognition and function, and is obtained by clinicians rating the severity of symptoms across six domains – memory, orientation, judgment & problem solving, community affairs, home & hobbies, and personal care – after a semi-structured interview with the patient and a reliable informant (e.g., family member) on a 0–3 scale for each domain (total range 0–18, with a higher score indicating worse dementia).
CDR-SB is designed to assess both cognition and function, and is obtained by clinicians rating the severity of symptoms across six domains – memory, orientation, judgment & problem solving, community affairs, home & hobbies, and personal care – after a semi-structured interview with the patient and a reliable informant (e.g., family member) on a 0–3 scale for each domain (total range 0-18, with a higher score indicating worse dementia).
Other potential consequences include, among other things: ● Restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; ● Fines, warning letters or other enforcement-related letters, or clinical holds on post-approval clinical trials; 32 ● Refusal of the FDA to approve pending marketing applications or supplements to approved MAs, or suspension or revocation of product approvals; ● Product seizure or detention, or refusal to permit the import or export of products; ● Injunctions or the imposition of civil or criminal penalties; ● Consent decrees, corporate integrity agreements, debarment, or exclusion from federal health care programs; and/or ● Mandated modification of promotional materials and labeling and the issuance of corrective information.
Other potential consequences include, among other things: ● Restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; ● Fines, warning letters or other enforcement-related letters, or clinical holds on post-approval clinical trials; ● Refusal of the FDA to approve pending marketing applications or supplements to approved MAs, or suspension or revocation of product approvals; ● Product seizure or detention, or refusal to permit the import or export of products; ● Injunctions or the imposition of civil or criminal penalties; ● Consent decrees, corporate integrity agreements, debarment, or exclusion from federal health care programs; and/or ● Mandated modification of promotional materials and labeling and the issuance of corrective information.
The FCA also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery; ● HIPAA imposes criminal and civil liability for executing a scheme to defraud any health care benefit program or making false statements relating to health care matters; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; ● The federal transparency requirements under the Physician Payments Sunshine Act require manufacturers of FDA-approved drugs, devices, biologics and medical supplies covered by Medicare or Medicaid to report, on an annual basis, to the CMS information related to payments and other transfers of value to physicians, certain advanced non-physician health care practitioners, and teaching hospitals or to entities or individuals at the request of, or designated on behalf of, such physicians, non-physician health care practitioners, and teaching hospitals as well as certain ownership and investment interests held by physicians and their immediate family members; and 33 ● Analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving health care items or services reimbursed by nongovernmental third-party payors, including private insurers.
The FCA also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery; ● HIPAA imposes criminal and civil liability for executing a scheme to defraud any health care benefit program or making false statements relating to health care matters; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; 31 ● The federal transparency requirements under the Physician Payments Sunshine Act require manufacturers of FDA-approved drugs, devices, biologics and medical supplies covered by Medicare or Medicaid to report, on an annual basis, to the CMS information related to payments and other transfers of value to physicians, certain advanced non-physician health care practitioners, and teaching hospitals or to entities or individuals at the request of, or designated on behalf of, such physicians, non-physician health care practitioners, and teaching hospitals as well as certain ownership and investment interests held by physicians and their immediate family members; and ● Analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving health care items or services reimbursed by nongovernmental third-party payors, including private insurers.
Under the statute, a generic drug is bioequivalent to an RLD if “the rate and extent of absorption of the drug do not show a significant difference from the rate and extent of absorption of the listed drug.” 30 Upon approval of an ANDA, the FDA indicates whether the generic product is “therapeutically equivalent” to the RLD in its publication Approved Drug Products with Therapeutic Equivalence Evaluations, also referred to as the Orange Book.
Under the statute, a generic drug is bioequivalent to an RLD if “the rate and extent of absorption of the drug do not show a significant difference from the rate and extent of absorption of the listed drug.” Upon approval of an ANDA, the FDA indicates whether the generic product is “therapeutically equivalent” to the RLD in its publication Approved Drug Products with Therapeutic Equivalence Evaluations, also referred to as the Orange Book.
A total of 91 participants were enrolled between October 2019 and March 2020 and randomized to receive neflamapimod capsules at one of two doses (40mg BID or 40mg TID) or matching placebo capsules (randomized 1:1) for 16 weeks.
A total of 91 participants were enrolled between October 2019 and March 2020 and randomized to receive neflamapimod capsules at one of two doses (40mg 6 BID or 40mg TID) or matching placebo capsules (randomized 1:1) for 16 weeks.
The process required by the FDA before a drug may be marketed in the U.S. generally involves the following: ● Completion of nonclinical laboratory tests, potentially animal studies, and formulation studies in compliance with the FDA’s GLP regulations; ● Submission to the FDA of an IND, which must become effective before human clinical trials may begin; ● Approval by an IRB covering each clinical trial site before each trial may be initiated at that site; ● Performance of adequate and well-controlled human clinical trials in accordance with GCP regulations and other clinical trial-related requirements to establish the safety and efficacy of the proposed drug product for each indication; ● Submission to the FDA of an NDA seeking marketing approval; ● A determination by the FDA within 60 days of its receipt of an NDA that the NDA is sufficiently complete to permit a substantial review, in which case the NDA is filed; ● Satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; ● Satisfactory completion of FDA audits of clinical trial sites that generated data in support of the NDA to assure compliance with GCP regulations and the integrity of the clinical data and/or FDA audits of the nonclinical studies submitted as part of the NDA; and ● FDA review and approval of the NDA, including consideration of the views of an FDA advisory committee, if one was involved, prior to any commercial marketing or sale of the drug in the U.S.
The process required by the FDA before a drug may be marketed in the US generally involves the following: ● Completion of nonclinical laboratory tests, potentially animal studies, and formulation studies in compliance with the FDA’s GLP regulations; ● Submission to the FDA of an IND, which must become effective before human clinical trials may begin; ● Approval by an IRB covering each clinical trial site before each trial may be initiated at that site; ● Performance of adequate and well-controlled human clinical trials in accordance with GCP regulations and other clinical trial-related requirements to establish the safety and efficacy of the proposed DP for each indication; ● Submission to the FDA of an NDA seeking marketing approval; ● A determination by the FDA within 60 days of its receipt of an NDA that the NDA is sufficiently complete to permit a substantial review, in which case the NDA is filed; ● Satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; ● Satisfactory completion of FDA audits of clinical trial sites that generated data in support of the NDA to assure compliance with GCP regulations and the integrity of the clinical data and/or FDA audits of the nonclinical studies submitted as part of the NDA; and ● FDA review and approval of the NDA, including consideration of the views of an FDA advisory committee, if one was involved, prior to any commercial marketing or sale of the drug in the US.
The review process may be extended by the FDA for three additional months to consider new information or in the case of a clarification provided by the applicant to address an outstanding deficiency identified by the FDA following the original submission. 27 During the review process, the FDA reviews the NDA to determine, among other things, whether the product is safe and effective and whether the facility in which it is manufactured, processed, packed, or held meets standards designed to assure the product’s continued strength, quality, and purity.
The review process may be extended by the FDA for three additional months to consider new information or in the case of a clarification provided by the applicant to address an outstanding deficiency identified by the FDA following the original submission. 25 During the review process, the FDA reviews the NDA to determine, among other things, whether the product is safe and effective and whether the facility in which it is manufactured, processed, packed, or held meets standards designed to assure the product’s continued strength, quality, and purity.
For example, accelerated approval has been used extensively in the development and approval of drugs for treatment of a variety of cancers in which the goal of therapy is generally to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy and sometimes large clinical trials to demonstrate a clinical or survival benefit. 29 The accelerated approval pathway is usually contingent on a sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the product candidate’s clinical benefit.
For example, Accelerated Approval has been used extensively in the development and approval of drugs for treatment of a variety of cancers in which the goal of therapy is generally to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy and sometimes large clinical trials to demonstrate a clinical or survival benefit. 27 The Accelerated Approval pathway is usually contingent on a sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the product candidate’s clinical benefit.
AscenD-LB Trial: Our Completed Phase 2a Trial in Dementia with Lewy Bodies The AscenD-LB Trial was an exploratory, Phase 2a clinical trial designed to evaluate the effects of neflamapimod against a range of clinical endpoints.
AscenD-LB Trial: Our Phase 2a Trial in Dementia with Lewy Bodies The AscenD-LB Trial was an exploratory, Phase 2a clinical trial designed to evaluate the effects of neflamapimod against a range of clinical endpoints.
In recent years, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.
In recent years, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for DPs.
The NDA must contain proof of the product candidate’s safety and substantial evidence of effectiveness for its proposed indication or indications in the form of relevant data available from pertinent preclinical and clinical studies, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls, and proposed labeling, among other things.
The NDA must contain proof of the product candidate’s safety and substantial evidence of effectiveness for its proposed indication or indications in the form of relevant data available from pertinent nonclinical and clinical studies, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls, and proposed labeling, among other things.
We are committed to creating and maintaining a workplace free from discrimination or harassment, including on the basis of any class protected by applicable law, and our recruitment, hiring, development, training, compensation, and advancement practices are based on qualifications, performance, skills, and experience without regard to gender, race, ethnicity or other demographics.
Company Culture We are committed to creating and maintaining a workplace free from discrimination or harassment, including on the basis of any class protected by applicable law, and our recruitment, hiring, development, training, compensation, and advancement practices are based on qualifications, performance, skills, and experience without regard to gender, race, ethnicity or other demographics.
In a preclinical study of neflamapimod that evaluated effects on recovery after stroke, which has been published in a peer-reviewed scientific journal, transient ischemia of sufficient duration was induced in rats such that significant neurologic disability developed without mortality, and the neurologic disability did not substantially reverse during follow-up without therapy.
In a nonclinical study of neflamapimod that evaluated effects on recovery after stroke, which has been published in a peer-reviewed scientific journal, transient ischemia of sufficient duration was induced in rats such that significant neurologic disability developed without mortality, and the neurologic disability did not substantially reverse during follow-up without therapy.
In order to market and successfully commercialize neflamapimod or any other future product candidate, to the extent it or they are approved, we must either develop these capabilities internally or make arrangements with third parties to perform these services. We may also collaborate with strategic partners that have experience in these fields.
In order to market and successfully commercialize neflamapimod or any other future product candidate, to the extent it or they are approved, we must either develop these capabilities internally or make arrangements with third parties to perform these services. We may also collaborate with global or regional strategic partners that have experience in these fields.
Supporting that concept is our preclinical data with neflamapimod demonstrating significant improvement in neurological recovery vs. vehicle treatment, and TUG results from the AscenD-LB clinical trial where positive effects of neflamapimod on basal forebrain mediated control of movement were observed in the clinic.
Supporting that concept is our nonclinical data with neflamapimod demonstrating significant improvement in neurological recovery vs. vehicle treatment, and TUG results from the AscenD-LB clinical trial where positive effects of neflamapimod on basal forebrain mediated control of movement were observed in the clinic.
In the aggregate, our potential milestone payment obligations, all of which relate to development milestones, under the Vertex Agreement are up to $122.0 million. To date, we have made an aggregate of $100,000 in payments to Vertex. In connection with our obligations under the Vertex Agreement, there is no minimum annual expenditure requirement.
In the aggregate, our potential milestone payment obligations, all of which relate to development milestones, under the Vertex Agreement are up to $117.0 million. To date, we have made an aggregate of $100,000 in payments to Vertex. In connection with our obligations under the Vertex Agreement, there is no minimum annual expenditure requirement.
In addition, under the Hatch-Waxman Amendments, the FDA may not approve an ANDA or 505(b)(2) NDA until any applicable period of non-patent exclusivity for the RLD has expired. These market exclusivity provisions under the FDCA also can delay the submission or the approval of certain applications.
Under the Hatch-Waxman Amendments, the FDA may not approve an ANDA or 505(b)(2) NDA until any applicable period of non-patent exclusivity for the RLD has expired. These market exclusivity provisions under the FDCA also can delay the submission or the approval of certain applications.
Such royalties will be on a sliding scale of percentages of net sales in the low- to mid-teens, depending on the amount of net sales in the applicable years. We are also obligated to make a milestone payment to Vertex upon net sales reaching a certain specified amount in any 12-month period.
Such royalties will be on a sliding scale of percentages of net sales in the low- to mid-teens, depending on the amount of net sales in the applicable years. We are also obligated to make a one-time milestone payment to Vertex upon net sales reaching a certain specified amount in any 12-month period.
In collaborative work conducted with the New York University Langone Medical Center, and published in the journal Nature Communications , we have demonstrated that neflamapimod targets the specific molecular mechanisms underlying BFC dysfunction and degeneration, and may successfully reverse disease progression in the early-stages of BFC dysfunction.
In collaborative work we conducted with the New York University Langone Medical Center, and later published in the journal Nature Communications , we demonstrated that neflamapimod targets the specific molecular mechanisms underlying BFC dysfunction and degeneration, and may successfully reverse disease progression in the early stages of BFC dysfunction.
Fast t rack designation provides increased opportunities for sponsor interactions with the FDA during preclinical and clinical development, in addition to the potential for rolling review once a marketing application is filed, meaning that the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the application, the FDA agrees to accept the sections and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the application.
Fast track Designation provides increased opportunities for sponsor interactions with the FDA during preclinical and clinical development, in addition to the potential for rolling review once a marketing application is filed, meaning that the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the application, the FDA agrees to accept the sections and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the application.
In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA. 26 r eports detailing the progress of and safety data from the clinical trials must be submitted at least annually to the FDA and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the investigational drug, findings from animal or in vitro testing that suggest a significant risk for human subjects and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.
In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA. 24 Reports detailing the progress of and safety data from the clinical trials must be submitted at least annually to the FDA and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the investigational drug, findings from animal or in vitro testing that suggest a significant risk for human subjects and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.
In addition, new government requirements, including those resulting from new legislation, may be established, or the FDA’s policies may change, which could delay or prevent regulatory approval of our products under development. 28 Fast Track, Priority Review, and Breakthrough Therapy Designations A sponsor may seek approval of its product candidate under programs designed to accelerate FDA’s review and approval of new drugs that meet certain criteria.
In addition, new government requirements, including those resulting from new legislation, may be established, or the FDA’s policies may change, which could delay or prevent regulatory approval of our products under development. 26 Fast Track, Breakthrough Therapy, Priority Review Designations, and CNPV A sponsor may seek approval of its product candidate under programs designed to accelerate FDA’s review and approval of new drugs that meet certain criteria.
Secondary objectives include further evaluation of the safety and tolerability of neflamapimod and treatment effects on (1) global rating of treatment effect, assessed by the ADCS-CGIC, (2) motor function, as assessed by the TUG test, and (3) cognition, assessed by a DLB-specific cognitive test battery.
Secondary objectives included further evaluation of the safety and tolerability of neflamapimod and treatment effects on (1) global rating of treatment effect, assessed by the ADCS-CGIC, (2) motor function, as assessed by the TUG test, and (3) cognition, assessed by a DLB-specific cognitive test battery.
Preclinical Studies and IND Preclinical, or nonclinical, studies generally include laboratory evaluation of product chemistry, toxicity and formulation, as well as in vitro and animal studies to assess the potential for adverse events and in some cases to establish a rationale for the investigational product’s therapeutic use.
Nonclinical Studies and IND Nonclinical studies generally include laboratory evaluation of product chemistry, toxicity and formulation, as well as in vitro and animal studies to assess the potential for adverse events and in some cases to establish a rationale for the investigational product’s therapeutic use.
Patents that issue in this family, if any, are expected to expire in 2041. ● The ninth patent family relates to treatment of a subpopulation of patients having DLB but no substantial Alzheimer’s like tau pathology (i.e., no AD co-pathology). In this family we have pending applications in the U.S., Europe, Japan, China, Canada, Australia, New Zealand, Korea, and Israel.
Patents that issue in this family, if any, are expected to expire in 2041. ● The ninth patent family relates to treatment of a subpopulation of patients having DLB but no substantial Alzheimer’s like tau pathology (i.e., no AD co-pathology). In this family we have pending applications in the US, Europe, Japan, China, Canada, Australia, New Zealand, Korea, and Israel.
Orphan Drugs Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, defined as a disease or condition with a patient population of fewer than 200,000 individuals in the U.S., or a patient population greater than 200,000 individuals in the U.S. and when there is no reasonable expectation that the cost of developing and making available the drug in the U.S. will be recovered from sales in the U.S. for that drug.
Orphan Drugs Under the Orphan Drug Act, the FDA may grant Orphan Drug Designation to a drug intended to treat a rare disease or condition, defined as a disease or condition with a patient population of fewer than 200,000 individuals in the US, or a patient population greater than 200,000 individuals in the US and when there is no reasonable expectation that the cost of developing and making available the drug in the US will be recovered from sales in the US for that drug.
Our competitors may have significantly greater financial resources, an established presence in the market, and significantly greater expertise in research and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals and reimbursement and marketing approved products than we do.
Our competitors may have significantly greater financial resources, an established presence in the market, and significantly greater expertise in research and development, manufacturing, nonclinical and clinical testing, obtaining regulatory approvals and reimbursement and marketing approved products than we do.
Of note, because the deficits in Morris-Water-Maze performance can be fully reversed by implanting healthy cholinergic neurons in the basal forebrain, those deficits are believed to be due to BFC dysfunction and degeneration. The results of these tests showed that treatment with neflamapimod fully reversed the learning deficits in the Morris-Water-Maze test in 20- to 22-month-old rats.
Of note, because the deficits in Morris-Water-Maze performance can be fully reversed by implanting healthy cholinergic neurons in the basal forebrain, those deficits are believed to be due to BFC dysfunction and degeneration. The results of these nonclinical studies showed that treatment with neflamapimod fully reversed the learning deficits in the Morris-Water-Maze test in 20- to 22-month-old rats.
This group shares a long-term commitment to execute our strategy, advance the development of neflamapimod, and improve treatment outcomes and quality of life for patients suffering from age-related neurologic disorders.
This group shares a long-term commitment to execute our strategy, advance the development of neflamapimod, and improve treatment outcomes and quality of life for patients suffering from age-related brain disorders.
Furthermore, the U.S. government, state legislatures and foreign governments have continued implementing cost containment programs, including price controls, restrictions on coverage and reimbursement and requirements for substitution of generic products. Adoption of price controls and cost containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our net revenue and results.
Furthermore, the US government, state legislatures and foreign governments have continued implementing cost containment programs, including price controls, restrictions on coverage and reimbursement and requirements for substitution of generic products. Adoption of price controls and cost containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our net revenue and results.
However, the IRA’s impact on the pharmaceutical industry in the U.S. remains uncertain, in part because multiple large pharmaceutical companies and other stakeholders (e.g., the U.S. Chamber of Commerce) have initiated federal lawsuits against CMS arguing the program is unconstitutional for a variety of reasons, among other complaints. Those lawsuits are currently ongoing.
However, the IRA’s impact on the pharmaceutical industry in the US remains uncertain, in part because multiple large pharmaceutical companies and other stakeholders (e.g., the US Chamber of Commerce) have initiated federal lawsuits against CMS arguing the program is unconstitutional for a variety of reasons, among other complaints. Those lawsuits are currently ongoing.
Specifically, the performance of aged rats on the last day of testing (day 17) showed that animals treated with neflamapimod at the optimal dose performed significantly better than vehicle–treated aged rats (p=0.007 for latency; p=0.01 for distance). Further, the performance of neflamapimod-treated aged rats was similar to that of young rats (i.e., fully reversed cognitive deficits).
Specifically, the performance of aged rats on the last day of testing (day 17) showed that animals treated with neflamapimod at the optimal dose performed significantly better than control–treated aged rats (p=0.007 for latency; p=0.01 for distance). Further, the performance of neflamapimod-treated aged rats was similar to that of young rats (i.e., cognitive deficits were fully reversed).
Additionally, starting in payment year 2026, CMS will negotiate drug prices annually for a select number of single-source Part D drugs without generic or biosimilar competition. CMS will also negotiate drug prices for a select number of Part B drugs starting for payment year 2028.
Additionally, CMS will negotiate drug prices annually for a select number of single-source Part D drugs without generic or biosimilar competition. CMS will also negotiate drug prices for a select number of Part B drugs starting for payment year 2028.
Data can come from company-sponsored clinical trials intended to test the safety and effectiveness of a use of the product, or from a number of alternative sources, including studies initiated by investigators. FDA approval of an NDA must be obtained before the corresponding drug may be marketed in the U.S.
Data can come from company-sponsored clinical trials intended to test the safety and effectiveness of a use of the product, or from a number of alternative sources, including studies initiated by investigators. FDA approval of an NDA must be obtained before the corresponding drug may be marketed in the US.
Healthcare Reform In the U.S. and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product and therapeutic candidates, restrict or regulate post-approval activities, and affect the ability to profitably sell product and therapeutic candidates that obtain marketing approval.
Healthcare Reform In the US and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product and therapeutic candidates, restrict or regulate post-approval activities, and affect the ability to profitably sell product and therapeutic candidates that obtain marketing approval.
Government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medical products and services, implementing reductions in Medicare and other healthcare funding and applying new payment methodologies. The U.S. Congress has considered reductions in Medicare reimbursement levels for medicines administered by physicians.
Government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medical products and services, implementing reductions in Medicare and other healthcare funding and applying new payment methodologies. The US Congress has considered reductions in Medicare reimbursement levels for medicines administered by physicians.
Tertiary endpoints will examine whether neflamapimod affects neuropsychiatric outcomes as assessed by the NPI-12, effect on fluctuations in cognition as assessed by the Dementia Cognitive Fluctuations Scale, impact on resting-state EEG (as well alpha-reactivity evaluated by EEG) and in a sub-set of participants, basal forebrain atrophy assessed by structural MRI.
Tertiary endpoints examined whether neflamapimod affects neuropsychiatric outcomes as assessed by the NPI-12, effect on fluctuations in cognition as assessed by the Dementia Cognitive Fluctuations Scale, impact on resting-state EEG (as well as alpha-reactivity evaluated by EEG) and in a sub-set of participants, basal forebrain atrophy assessed by structural MRI.
The manufacturer and its products are also subject to similar post-approval requirements by regulatory authorities comparable to FDA in jurisdictions outside of the U.S. where the products are approved. Although physicians may prescribe legally available products for off-label uses, manufacturers may not market or promote such uses.
The manufacturer and its products are also subject to similar post-approval requirements by regulatory authorities comparable to FDA in jurisdictions outside of the US where the products are approved. Although physicians may prescribe legally available products for off-label uses, manufacturers may not market or promote such uses.
Individual patents extend for varying periods depending on the date of filing of the patent application or the date of patent issuance and the legal term of patents in the countries in which they are obtained. Generally, patents issued for regularly filed applications in the U.S. are granted a term of 20 years from the earliest effective non-provisional filing date.
Individual patents extend for varying periods depending on the date of filing of the patent application or the date of patent issuance and the legal term of patents in the countries in which they are obtained. Generally, patents issued for regularly filed applications in the US are granted a term of 20 years from the earliest effective non-provisional filing date.
The manufacturing process must be capable of consistently producing quality batches of the drug candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final drug product.
The manufacturing process must be capable of consistently producing quality batches of the drug candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final DP.
In addition, orphan product exclusive marketing rights in the U.S. may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.
In addition, orphan product exclusive marketing rights in the US may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.
In shorter-term studies, the primary target organ was the liver, with findings commencing at plasma drug concentration levels 20-fold higher than the AD clinical trial exposures.
In shorter-term studies, the primary target organ was the liver, with findings commencing at plasma drug concentration levels 20-fold higher than the CNS clinical trial exposures.
Aged Rat Model To obtain preclinical proof-of-principle and confirm the role of p38α in the development of synaptic dysfunction, we tested neflamapimod in a rat model of age-related cognitive decline.
Aged Rat Model To obtain nonclinical proof-of-principle and confirm the role of p38α in the development of synaptic dysfunction, we tested neflamapimod in a rat model of age-related cognitive decline.
Sales of our products, when and if approved for marketing in the U.S., will depend, in part, on the extent to which our products will be covered by third-party payors, such as federal, state, and foreign government healthcare programs, commercial insurance and managed healthcare organizations.
Sales of our products, when and if approved for marketing in the US, will depend, in part, on the extent to which our products will be covered by third-party payors, such as federal, state, and foreign government healthcare programs, commercial insurance and managed healthcare organizations.
Moreover, we benefit from the significant pharmaceutical development experience of our management team members and directors, several of whom have worked on neflamapimod in the past at Vertex and are well acquainted with the unique properties of the compound for application in DLB and other potential target indications. ● Our Co-Founder, President and Chief Executive Officer, John Alam, MD , is a biotech industry veteran with more than 30 years’ experience and is an industry leader in translational medicine.
Moreover, we benefit from the significant pharmaceutical development experience of our management team members and directors, several of whom have worked on neflamapimod in the past at Vertex and are well acquainted with the unique properties of the compound for application in DLB and other potential target indications. ● Our Co-Founder, Director, President and Chief Executive Officer, John Alam, MD , has more than 30 years’ experience and is an industry leader in translational medicine.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we otherwise may have obtained and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition and results of operations. 34 As previously mentioned, the primary trend in the U.S. healthcare industry and elsewhere is cost containment.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we otherwise may have obtained and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition and results of operations. 32 As previously mentioned, the primary trend in the US healthcare industry and elsewhere is cost containment.
Our policy is to seek to protect our proprietary position by, among other methods, pursuing and obtaining patent protection in the U.S. and in jurisdictions outside of the U.S. related to our proprietary technology, inventions, improvements and our product candidates that are important to the development and implementation of our business.
Our policy is to seek to protect our proprietary position by, among other methods, pursuing and obtaining patent protection in the US and in jurisdictions outside of the US related to our proprietary technology, inventions, improvements and our product candidates that are important to the development and implementation of our business.
Reauthorization of the prescription drug user fee program would need to be finalized by Congress by the end of September 2027 in order to avoid a disruption in FDA’s review goals for NDAs and other activities supported by user fees assessed against industry.
Reauthorization of the prescription drug user fee program must be finalized by Congress by the end of September 2027 in order to avoid a disruption in FDA’s review goals for NDAs and other activities supported by user fees assessed against industry.
We also make available, free of charge and through our website, the charters of the committees of the Board, our Corporate Governance Guidelines, and our Code of Business Conduct and Ethics. 39
We also make available, free of charge and through our website, the charters of the committees of the Board, our Corporate Governance Guidelines, and our Code of Business Conduct and Ethics. 37
Pediatric Exclusivity Pediatric exclusivity is a type of non-patent marketing exclusivity available in the U.S. and, if granted, it provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity or listed patents.
Pediatric Exclusivity Pediatric exclusivity is a type of non-patent marketing exclusivity available in the US and, if granted, it provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity or listed patents.
The cGMP regulations include requirements relating to organization of personnel, buildings and facilities, equipment, control of components and drug product containers and closures, production and process controls, packaging and labeling controls, holding and distribution, laboratory controls, records and reports and returned or salvaged products.
The cGMP regulations include requirements relating to organization of personnel, buildings and facilities, equipment, control of components and DP containers and closures, production and process controls, packaging and labeling controls, holding and distribution, laboratory controls, records and reports and returned or salvaged products.
Concurrent with clinical trials, companies may perform additional nonclinical studies and develop additional information about a drug candidate’s chemistry and physical characteristics as well as finalize a process for its manufacturing in commercial quantities in accordance with cGMP requirements.
Concurrent with clinical trials, companies may perform additional nonclinical studies and develop additional information about a drug candidate’s physiochemical characteristics as well as finalize a process for its manufacturing in commercial quantities in accordance with cGMP requirements.
In the primary analysis of the AscenD-LB Trial, which included all participants enrolled and evaluated for treatment effects, neflamapimod demonstrated improvement compared to placebo in dementia severity (assessed by CDR-SB, p=0.023 vs. placebo) and functional mobility (gait or walking ability as assessed by the TUG test, p=0.044 vs. placebo).
In the primary analysis of the AscenD-LB Trial, which included all participants enrolled and evaluated for treatment effects, neflamapimod demonstrated improvement compared to placebo in dementia severity (assessed by CDR-SB, p=0.023 vs. placebo) and functional mobility (as assessed by the TUG test, p=0.044 vs. placebo).
On August 16, 2023, we completed the Merger, which was treated as a "reverse recapitalization" under U.S. GAAP pursuant to which EIP’s historical results of operations replaced the Company's for all periods prior to the Merger.
On August 16, 2023, we completed the Merger, which was treated as a "reverse recapitalization" under US GAAP pursuant to which EIP’s historical results of operations replaced the Company's for all periods prior to the Merger.
The issued patent in the U.S. is set to expire in 2037, and other patents that issue in this family in the future, if any, are also expected to expire in 2037. 23 ● The sixth patent family relates to formulations of neflamapimod, including pharmaceutical compositions for oral administration exhibiting desirable PK and processes for the manufacture thereof.
The issued patent in the US is set to expire in 2037, and other patents that issue in this family in the future, if any, are also expected to expire in 2037. ● The sixth patent family relates to formulations of neflamapimod, including pharmaceutical compositions for oral administration exhibiting desirable PK and processes for the manufacture thereof.
Failure to comply with the applicable U.S. requirements at any time during the product development and approval process or after approval may subject an applicant to a variety of administrative or judicial sanctions.
Failure to comply with the applicable US requirements at any time during the product development and approval process or after approval may subject an applicant to a variety of administrative or judicial sanctions.
This calculation is made on a drug product by drug product basis and the amount of the rebate owed to the federal government is directly dependent on the volume of a drug product that is paid for by Medicare Parts B or D.
This calculation is made on a DP by DP basis and the amount of the rebate owed to the federal government is directly dependent on the volume of a DP that is paid for by Medicare Parts B or D.
It is impossible to predict whether further legislative or regulatory changes will be enacted, whether FDA regulations, guidance or interpretations will be changed or what the impact of such changes, if any, may be. Other U.S.
It is impossible to predict whether further legislative or regulatory changes will be enacted, whether FDA regulations, guidance or interpretations will be changed or what the impact of such changes, if any, may be.
The process of obtaining regulatory approvals and the subsequent compliance with applicable federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. 24 U.S. Government Regulation of Drug Products In the U.S., the FDA regulates drugs under the FDCA and its implementing regulations.
The process of obtaining regulatory approvals and the subsequent compliance with applicable federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. US Government Regulation of Drug Products In the US, the FDA regulates drugs under the FDCA and its implementing regulations.
As shown in the table below, participants in the AscenD-LB Trial without evidence of AD co-pathology had an average higher treatment response (evaluated by Cohen’s d effect size) compared to the average response in the overall trial, and demonstrated significant improvement in cognitive tests of attention, the CDR-SB, the TUG test, and in a test of recognition memory (International Shopping List Test recognition index), with Cohen’s d treatment effect sizes for each of these endpoints indicating clinical effects that are moderate-to-large in magnitude (> 0.7).
As shown in the table below, participants without evidence of AD co-pathology had an average higher treatment response (evaluated by Cohen’s d effect size) compared to the average response in the overall trial population, and demonstrated significant improvement in CDR-SB, cognitive tests of attention, the TUG test, and in a test of recognition memory (International Shopping List Test recognition index), with Cohen’s d treatment effect sizes indicating, in each case, clinical effects that are moderate-to-large in magnitude (> 0.7).
In particular, a marketing application must demonstrate that the manufacturing methods and quality controls used to produce the drug product are adequate to preserve the drug’s identity, strength, quality, and purity.
In particular, a marketing application must demonstrate that the manufacturing methods and quality controls used to produce the DP are adequate to preserve the drug’s identity, strength, quality, and purity.
Health Care Laws and Regulations If our product candidates are approved in the U.S., we will have to comply with various U.S. federal and state laws, rules and regulations pertaining to health care fraud and abuse, including anti-kickback laws and physician self-referral laws, rules and regulations.
Other US Health Care Laws and Regulations If our product candidates are approved in the US, we will have to comply with various US federal and state laws, rules and regulations pertaining to health care fraud and abuse, including anti-kickback laws and physician self-referral laws, rules and regulations.
We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the U.S. or abroad.
We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the US or abroad.
The effects of these efforts remain uncertain pending the outcomes of several federal lawsuits challenging state authority to regulate prescription drug payment limits. We expect that federal, state and local governments in the U.S. will continue to consider legislation directed at lowering the total cost of healthcare. In December 2020, the U.S.
The effects of these efforts remain uncertain pending the outcomes of several federal lawsuits challenging state authority to regulate prescription drug payment limits. We expect that federal, state and local governments in the US will continue to consider legislation directed at lowering the total cost of healthcare.
Because generic and biosimilar product developers need samples to conduct certain comparative testing required by the FDA, some have attributed the inability to timely obtain samples as a cause of delay in the entry of generic and biosimilar products.
Because generic and biosimilar product developers need samples of an RLD to conduct certain comparative testing required by the FDA, some attributed the inability to timely obtain such samples as a cause of delay in the entry of generic and biosimilar products.
In this family, we have an issued patent in the U.S. that is set to expire in 2039. ● The seventh patent family relates to the treatment of DLB. In this family we have pending applications in the U.S., Europe, Japan, China, Canada, and Hong Kong.
In this family, we have an issued patent in the US that is set to expire in 2039. ● The seventh patent family relates to the treatment of DLB. In this family we have issued patents in Europe and Japan and pending applications in the US, Europe, Japan, China, Canada, and Hong Kong.
Breakthrough therapy designation provides all the features of f ast t rack designation in addition to intensive guidance on an efficient development program beginning as early as Phase 1, and FDA organizational commitment to expedited development, including involvement of senior managers and experienced review and regulatory staff in a proactive, collaborative, cross-disciplinary review, where appropriate.
Breakthrough Therapy Designation provides all the features of fast track Designation in addition to intensive guidance on an efficient development program beginning as early as Phase 1, and FDA organizational commitment to expedited development, including involvement of senior managers and experienced review and regulatory staff in a proactive, collaborative, cross-disciplinary review, where appropriate.
In addition, the FDA granted neflamapimod Fast Track designation for the treatment of DLB in October 2019 and Orphan Drug designation for the treatment of FTD in November 2024.
In addition, the FDA granted neflamapimod Fast Track Designation for the treatment of DLB in October 2019 and Orphan Drug Designation for the treatment of frontotemporal dementia in November 2024.
In addition, even in animal models of rapidly progressive neurodegeneration (e.g., prion disease), interventions that reverse synaptic dysfunction both improve function and “arrest” the neurodegenerative process. Thus, therapeutic interventions that target synaptic dysfunction have the potential to both reverse and slow disease progression in the early stages of neurodegenerative dementias.
In addition, even in animal models of rapidly progressive neurodegenerative disorders, interventions that reverse synaptic dysfunction both improve function and “arrest” the neurodegenerative process. Thus, therapeutic interventions that target synaptic dysfunction have the potential to both reverse and slow disease progression in the early stages of neurodegenerative dementias.
Additionally, when assessed by MRI, the volume of the basal forebrain is reduced, relative to age-matched healthy control, most prominently in patients who semantic variant PPA and behavioral variant FTD and in patients who have “tauopathies” (i.e., patients at autopsy who have tau pathology, rather than TDP-43 pathology).
Additionally, when assessed by MRI, the volume of the basal forebrain is reduced, relative to age-matched healthy control, most prominently in patients who have “tauopathies” (i.e., patients at autopsy who have tau pathology, rather than TDP-43 pathology).
A f ast t rack designated product candidate may also qualify for accelerated approval (described below) or priority review, under which the FDA sets the target date for FDA action on the NDA or biologics license application at six months after the FDA accepts the application for filing.
A fast track Designated product candidate may also qualify for Accelerated Approval (described below) or Priority Review, under which the FDA sets the target date for FDA action on the NDA or biologics license application at six months after the FDA accepts the application for filing.
In Europe, clinical trial applications in support of our clinical trials have been reviewed and approved by the national regulatory authorities in each of the Netherlands, United Kingdom, Czech Republic and Denmark.
In Europe, clinical trial applications in support of our clinical trials have been reviewed and approved in each of the Netherlands, United Kingdom, Czech Republic and Denmark.
EIP200 – Novel Co-Crystal of Neflamapimod We have an issued patent, set to expire in 2038, in the U.S. for novel co-crystals of neflamapimod with identified, specific, Generally Recognized as Safe compounds that have the potential to improve the solubility and other physical properties of neflamapimod.
EIP200 – Novel Co-Crystal of Neflamapimod We have an issued patent in the US, expiring in 2038, for novel co-crystals of neflamapimod with identified, specific, Generally Recognized as Safe compounds that have the potential to improve the solubility and other physical properties of neflamapimod.
Marketing Application Submission, Review by the FDA, and Marketing Approval Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, preclinical studies and clinical trials are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications.
Risk Factors – Risks Related to Our Product Development and Regulatory Approval . ” Marketing Application Submission, Review by the FDA, and Marketing Approval Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, nonclinical studies and clinical trials are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications.
(Nasdaq: SNY), a top ten global pharmaceutical company. Dr. Alam also has direct experience with neflamapimod from his time at Vertex, where he was Executive Vice President, Medicines Development and Chief Medical Officer. Dr. Alam also led the clinical development of Biogen’s first approved drug for the treatment of multiple sclerosis, Avonex. ● Our Co-Founder and Director, Dr.
Alam also has direct experience with neflamapimod from his time at Vertex, where he was Executive Vice President, Medicines Development, and Chief Medical Officer. Dr. Alam also led the clinical development of Biogen’s first approved drug for the treatment of multiple sclerosis, Avonex. ● Our Co-Founder and Director, Dr.
In this family, we hold issued patents in the U.S., Europe, Japan, China, Canada, Australia, and Hong Kong. These patents are set to expire in 2032. ● The second patent family relates to the use of neflamapimod for improving cognition. In this family, we hold issued patents in the U.S., Europe, Japan, and a pending application in China.
In this family, we hold issued patents in the US, Europe, Japan, China, Canada, Australia, and Hong Kong. These patents are set to expire in 2032. ● The second patent family relates to the use of neflamapimod for improving cognition. In this family, we hold issued patents in the US, Europe, and Japan.
Patents that issue in this family, if any, are expected to expire in 2040. ● The eighth patent family relates to treatment of gait dysfunction related to neurodegenerative disease. In this family we have pending applications in the U.S., Europe, Japan, China, Canada, Australia, Hong Kong, and Israel.
Patents issued and that may issue in this family are expected to expire in 2040. ● The eighth patent family relates to treatment of gait dysfunction related to neurodegenerative disease. In this family we have pending applications in the US, Europe, Japan, China, Canada, Australia, Hong Kong, and Israel.
Risk Factors—Risks Related to the Company’s Intellectual Property.” Government Regulation The FDA and comparable regulatory authorities in other countries impose requirements upon companies involved in the clinical development, manufacture, marketing and distribution of drugs, such as those we are developing. These requirements can, in some instances, be substantial and burdensome.
For more information, please see “Item 1A. Risk Factors—Risks Related to Our Intellectual Property.” Government Regulation The FDA and comparable regulatory authorities in other countries impose requirements upon companies involved in the clinical development, manufacture, marketing and distribution of drugs, such as those we are developing. These requirements can, in some instances, be substantial and burdensome.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, conclusions based on data from analyses of open-label results, including the 16-week Extension Phase results from the RewinD-LB Trial, may not be reproduced when implemented in large, well-controlled, randomized clinical trials. ● If the Company does not adequately protect its proprietary rights, the Company may not be able to compete effectively. ● The Company has no history of commercializing pharmaceutical products, which may make it difficult to evaluate the prospects for its future viability. ● Even if neflamapimod or any other product candidate the Company develops receives marketing approval, it may fail to achieve the level of acceptance necessary for commercial success. ● The Company’s future success depends in large part on the Company’s ability to retain its key employees, as well as its ability to attract, train and motivate additional qualified personnel.
Biggest changeIn addition, preliminary, topline and interim data from our clinical trials that we may announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data. ● We face substantial competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively. ● If we do not adequately protect our proprietary rights, we may not be able to compete effectively. ● We have no history of commercializing pharmaceutical products, which may make it difficult to evaluate the prospects for their future viability. ● Even if neflamapimod or any other product candidate we develop receives marketing approval, it may fail to achieve the level of acceptance necessary for commercial success. 39 ● Our future success depends in large part on our ability to retain our key employees, as well as our ability to attract, train and motivate additional qualified personnel.
For instance, Washington state recently passed the “My Health My Data” Act, which came into force in 2024 and regulates “consumer health data,” which is broadly defined as “personal information that is linked or reasonably linkable to a consumer and that identifies a consumer’s past, present, or future physical or mental health.” The “My Health My Data” Act provides exemptions for personal data used or shared in connection with certain research activities, including data subject to 45 C.F.R.
For instance, Washington state passed the “My Health My Data” Act, which came into force in 2024 and regulates “consumer health data,” which is broadly defined as “personal information that is linked or reasonably linkable to a consumer and that identifies a consumer’s past, present, or future physical or mental health.” The “My Health My Data” Act provides exemptions for personal data used or shared in connection with certain research activities, including data subject to 45 C.F.R.
While the ultimate outcome of investigations, inquiries, information requests and legal proceedings is difficult to predict, defense of litigation claims (even if ultimately successful) can be expensive, time-consuming and distracting, and adverse resolutions or settlements of those matters may result in, among other things, modifications to business practices, costs and significant payments, any of which could have a material adverse effect on the Company’s business, financial condition, results of operations and prospects.
While the ultimate outcome of investigations, inquiries, information requests and legal proceedings is difficult to predict, defense of litigation claims (even if ultimately successful) can be expensive, time-consuming and distracting, and adverse resolutions or settlements of those matters may result in, among other things, modifications to business practices, costs and significant payments, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
Subject enrollment and retention in clinical trials depends on many factors, including: ● the eligibility criteria defined in the protocol; ● the size of the patient population required for analysis of the trial’s primary endpoints; ● the nature of the trial protocol; ● the proximity of potential subjects to clinical sites; 48 ● the existing body of safety and efficacy data with respect to the product candidate; ● the Company’s ability to recruit clinical trial investigators with the appropriate competencies and experience; ● clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies; ● competing clinical trials being conducted by other companies or institutions; ● the risk that participants enrolled in clinical trials will drop out of the trials before completion; and ● the operational efficiency of trial sites, including sufficient staffing.
Subject enrollment and retention in clinical trials depends on many factors, including: ● the eligibility criteria defined in the protocol; ● the size of the patient population required for analysis of the trial’s primary endpoints; ● the nature of the trial protocol; ● the proximity of potential subjects to clinical sites; ● the existing body of safety and efficacy data with respect to the product candidate; ● Our ability to recruit clinical trial investigators with the appropriate competencies and experience; ● clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies; ● competing clinical trials being conducted by other companies or institutions; ● the risk that participants enrolled in clinical trials will drop out of the trials before completion; and ● the operational efficiency of trial sites, including sufficient staffing.
Further, manufacturing changes are generally categorized as having either a substantial, moderate, or minimal potential to adversely affect the identity, strength or quality of the drug product as they may relate to the safety or effectiveness of the product, and if a change has a substantial potential to have an adverse effect on the drug product, an applicant must submit and receive FDA approval of a prior approval supplemental application before the product made with the manufacturing change is distributed.
Further, manufacturing changes are generally categorized as having either a substantial, moderate, or minimal potential to adversely affect the identity, strength or quality of the DP as they may relate to the safety or effectiveness of the product, and if a change has a substantial potential to have an adverse effect on the DP, an applicant must submit and receive FDA approval of a prior approval supplemental application before the product made with the manufacturing change is distributed.
The degree of market acceptance will depend on a number of factors, including but not limited to: ● the ability to provide acceptable evidence of efficacy and potential advantages compared to alternative treatments; ● the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; ● the Company’s ability to offer its drug for sale at competitive prices, which may be subject to regulatory control; ● the availability of third-party insurance coverage and adequate reimbursement; ● the availability of alternative treatments and the cost of a new treatment in relation to those alternatives, including any similar generic treatments; ● the relative convenience and ease of administration of a new treatment compared to alternatives, and the prevalence and severity of any side effects of a new treatment; ● the strength and effectiveness of the Company’s sales, marketing and distribution capabilities, either internally or in collaboration with others; ● any restrictions on the use of the Company’s product together with other medications; and ● any restrictions on the distribution of the Company’s product such as those imposed under a mandatory REMS program.
The degree of market acceptance will depend on a number of factors, including but not limited to: ● the ability to provide acceptable evidence of efficacy and potential advantages compared to alternative treatments; ● the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; ● our ability to offer our drug for sale at competitive prices, which may be subject to regulatory control; ● the availability of third-party insurance coverage and adequate reimbursement; 60 ● the availability of alternative treatments and the cost of a new treatment in relation to those alternatives, including any similar generic treatments; ● the relative convenience and ease of administration of a new treatment compared to alternatives, and the prevalence and severity of any side effects of a new treatment; ● the strength and effectiveness of our sales, marketing and distribution capabilities, either internally or in collaboration with others; ● any restrictions on the use of our product together with other medications; and ● any restrictions on the distribution of our product such as those imposed under a mandatory REMS program.
This reliance on CMOs and suppliers subjects the Company to inherent uncertainties related to product safety, availability, security and cost. Holders of NDAs, or other forms of FDA approvals, or those distributing a regulated product under their own name, are ultimately responsible for compliance with manufacturing obligations even if the manufacturing is conducted by a third party.
This reliance on CMOs and suppliers subjects us to inherent uncertainties related to product safety, availability, security and cost. Holders of NDAs, or other forms of FDA approvals, or those distributing a regulated product under their own name, are ultimately responsible for compliance with manufacturing obligations even if the manufacturing is conducted by a third party.
However, current or former employees, consultants, contractors and advisers may unintentionally or willfully disclose the Company’s confidential information to competitors, and confidentiality agreements may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. Enforcing a claim that a third party obtained illegally and is using trade secrets or confidential know-how is expensive, time-consuming and unpredictable.
However, current or former employees, consultants, contractors and advisers may unintentionally or willfully disclose our confidential information to competitors, and confidentiality agreements may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. Enforcing a claim that a third party obtained illegally and is using trade secrets or confidential know-how is expensive, time-consuming and unpredictable.
In the event the Company’s common stock is delisted from Nasdaq for a failure to meet such requirements and is not eligible for quotation or listing on another market or exchange, trading of the Company’s common stock could be conducted only in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board.
In the event our common stock is delisted from Nasdaq for a failure to meet such requirements and is not eligible for quotation or listing on another market or exchange, trading of our common stock could be conducted only in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board.
The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, its ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes. Average review times at the agency have fluctuated in recent years as a result.
The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, our ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes. Average review times at the agency have fluctuated in recent years as a result.
We or our licensing partners may experience difficulties recruiting a diverse population of patients in attempting to fulfill the requirements of any approved diversity action plan. Furthermore, any negative results the Company may report in clinical trials may make it difficult or impossible to recruit and retain subjects in other clinical trials of that same product candidate.
We or our licensing partners may experience difficulties recruiting a diverse population of patients in attempting to fulfill the requirements of any approved diversity action plan. 47 Furthermore, any negative results we may report in clinical trials may make it difficult or impossible to recruit and retain subjects in other clinical trials of that same product candidate.
If neflamapimod or any other product candidate that the Company may develop in the future does not provide a treatment regimen that is at least as beneficial as the current standard of care or otherwise does not provide some additional patient benefit over the current standard of care, that product will not achieve market acceptance, and the Company will not generate sufficient revenues to achieve profitability.
If neflamapimod or any other product candidate that we may develop in the future does not provide a treatment regimen that is at least as beneficial as the current standard of care or otherwise does not provide some additional patient benefit over the current standard of care, that product will not achieve market acceptance, and we will not generate sufficient revenues to achieve profitability.
Further, the CPRA, which became effective in 2023 and amends the CCPA, creates additional obligations with respect to processing and storing personal information. While there is limited exception for protected health information that is subject to HIPAA and clinical trial regulations, the CCPA may regulate or impact the Company’s processing of personal information depending on the context.
Further, the CPRA, which became effective in 2023 and amends the CCPA, creates additional obligations with respect to processing and storing personal information. While there is limited exception for protected health information that is subject to HIPAA and clinical trial regulations, the CCPA may regulate or impact our processing of personal information depending on the context.
Preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and early-stage clinical trials have nonetheless failed to obtain marketing approval of their products. It is impossible to predict when or if neflamapimod will receive marketing approval.
Nonclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in nonclinical studies and early-stage clinical trials have nonetheless failed to obtain marketing approval of their products. It is impossible to predict when or if neflamapimod will receive marketing approval.
Clinical trials may be delayed, suspended or prematurely terminated because costs are greater than the Company anticipates or for a variety of other reasons, such as: ● delay or failure in reaching agreement with the FDA or a comparable foreign regulatory authority on a trial design that the Company is able to execute; ● delay or failure in obtaining authorization to commence a trial, including approval from the appropriate IRB or ethics committee at each clinical site to conduct testing of a candidate on human subjects, or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a clinical trial; ● delays in reaching, or failure to reach, agreement on acceptable terms with prospective trial sites and prospective CROs, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ● inability, delay or failure in identifying and maintaining a sufficient number of trial sites, many of which may already be engaged in other clinical programs; ● inability, delay or failure in identifying, recruiting, and training suitable clinical investigators; ● delay or failure in recruiting, screening, and enrolling suitable subjects to participate in a trial; ● delay or failure in having subjects complete a trial or return for post-treatment follow-up; ● delays caused by operational issues at clinical trial sites, including insufficient staffing; ● changes to the clinical trial protocols and/or changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; ● clinical sites and investigators deviating from the clinical protocol, failing to conduct the trial in accordance with GCP or other regulatory requirements, or dropping out of a trial; ● failure to initiate or delay of or inability to complete a clinical trial as a result of the authorizing IND or foreign clinical trial application being placed on temporary or permanent clinical hold by the FDA or comparable foreign regulatory authority; ● lack of adequate funding to continue a clinical trial, including as a result of unforeseen costs due to enrollment delays, requirements to conduct additional clinical trials and increased expenses associated with the services of the Company’s CROs and other third parties, or the cost of clinical trials being greater than the Company anticipated; ● delays in manufacturing, testing, releasing, validating or importing/exporting sufficient stable quantities of drug product for use in clinical trials or the inability to do any of the foregoing; ● developments on trials conducted by competitors for related technology that raise FDA or foreign regulatory authority concerns about risk to patients of a technology or in any indication more broadly; ● clinical trials of the Company’s product candidates may produce negative or inconclusive results, and the Company may decide, or regulators may require the Company, to conduct additional nonclinical studies, clinical trials or abandon product development programs; 46 ● the number of patients required for clinical trials of the Company’s product candidates may be larger than the Company anticipates, enrollment in these clinical trials may be slower than it anticipates or participants may drop out of these clinical trials at a higher rate than it anticipates; ● the Company’s third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to the Company in a timely manner, or at all; ● regulators, the IRB or a Data Safety Monitoring Board if one is used for the Company’s clinical trials, may require that the Company suspend or terminate its clinical trials for various reasons, including noncompliance with regulatory requirements, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, or a finding that the participants are being exposed to unacceptable health risks; ● the supply or quality of the Company’s product candidates or other materials necessary to conduct clinical trials of the Company’s product candidates may be insufficient or inadequate; ● transfer of manufacturing processes to larger-scale facilities operated by a CMO, and delays or failure by the Company’s CMOs or the Company to make any necessary changes to such manufacturing process; ● the FDA or comparable foreign regulatory authorities may require the Company to submit additional data or impose other requirements before permitting it to initiate a clinical trial; or ● changes in governmental regulations or administrative actions.
Clinical trials may be delayed, suspended or prematurely terminated because costs are greater than we anticipate or for a variety of other reasons, such as: ● delay or failure in reaching agreement with the FDA or a comparable foreign regulatory authority on a trial design that we are able to execute; ● delay or failure in obtaining authorization to commence a trial, including approval from the appropriate IRB or ethics committee at each clinical site to conduct testing of a candidate on human subjects, or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a clinical trial; ● delays in reaching, or failure to reach, agreement on acceptable terms with prospective trial sites and prospective CROs, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ● inability, delay or failure in identifying and maintaining a sufficient number of trial sites, many of which may already be engaged in other clinical programs; ● inability, delay or failure in identifying, recruiting, and training suitable clinical investigators; 44 ● delay or failure in recruiting, screening, and enrolling suitable subjects to participate in a trial; ● delay or failure in having subjects complete a trial or return for post-treatment follow-up; ● delays caused by operational issues at clinical trial sites, including insufficient staffing; ● changes to the clinical trial protocols and/or changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; ● clinical sites and investigators deviating from the clinical protocol, failing to conduct the trial in accordance with GCP or other regulatory requirements, or dropping out of a trial; ● failure to initiate or delay of or inability to complete a clinical trial as a result of the authorizing IND or foreign clinical trial application being placed on temporary or permanent clinical hold by the FDA or comparable foreign regulatory authority; ● lack of adequate funding to continue a clinical trial, including as a result of unforeseen costs due to enrollment delays, requirements to conduct additional clinical trials and increased expenses associated with the services of our CROs and other third parties, or the cost of clinical trials being greater than we anticipated; ● delays in manufacturing, testing, releasing, validating or importing/exporting sufficient stable quantities of DP for use in clinical trials or the inability to do any of the foregoing; ● developments on trials conducted by competitors for related technology that raise FDA or foreign regulatory authority concerns about risk to patients of a technology or in any indication more broadly; ● clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional nonclinical studies, clinical trials or abandon product development programs; ● the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate; ● our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; ● regulators, the IRB or a Data Safety Monitoring Board if one is used for our clinical trials, may require that we suspend or terminate our clinical trials for various reasons, including noncompliance with regulatory requirements, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, or a finding that the participants are being exposed to unacceptable health risks; ● the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; ● transfer of manufacturing processes to larger-scale facilities operated by a CMO, and delays or failure by our CMOs or we to make any necessary changes to such manufacturing process; ● the FDA or comparable foreign regulatory authorities may require us to submit additional data or impose other requirements before permitting us to initiate a clinical trial; or ● changes in governmental regulations or administrative actions.
The size and open-label design of portions of the Company's non-Phase 3 studies may introduce clinical or statistical bias or may generate results that may not fully distinguish between drug effects and random variation. Different methods of statistical analysis on clinical data from the same study may lead to objectively different numerical results.
The size and open-label design of portions of our non-Phase 3 studies may introduce clinical or statistical bias or may generate results that may not fully distinguish between drug effects and random variation. Different methods of statistical analysis on clinical data from the same study may lead to objectively different numerical results.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of the Company’s confidential information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments.
If the FDA or a comparable foreign regulatory authority approves neflamapimod or any of the Company’s future product candidates for marketing, activities such as the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping for the product will be subject to extensive and ongoing regulatory requirements.
If the FDA or a comparable foreign regulatory authority approves neflamapimod or any of our future product candidates for marketing, activities such as the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping for the product will be subject to extensive and ongoing regulatory requirements.
SAEs or undesirable side effects caused by neflamapimod, or any other product candidates the Company may develop or acquire, could cause it or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign authorities.
SAEs or undesirable side effects caused by neflamapimod, or any other product candidates we may develop or acquire, could cause it or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign authorities.
If neflamapimod, or any other product candidates the Company may develop or acquire, receives marketing approval and the Company or others identify undesirable side effects caused by such product candidates (or any other similar products) after such approval, a number of potentially significant negative consequences could result, including: ● regulatory authorities may withdraw or limit their approval of such product candidates; ● regulatory authorities may require the addition of labeling statements, such as a “Boxed” Warning or a contraindication; ● the Company may be required to change the way such product candidates are distributed or administered, conduct additional clinical trials or change the labeling of the product candidates; ● the FDA may require a REMS plan to mitigate risks, which could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools, and regulatory authorities in other jurisdictions may require comparable risk mitigation plans; 51 ● the Company may be subject to regulatory investigations and government enforcement actions; ● the FDA or a comparable foreign regulatory authority may require the Company to conduct additional clinical trials or costly post-marketing testing and surveillance to monitor the safety and efficacy of the product; ● the Company may decide to recall such product candidates from the marketplace after they are approved; ● the Company could be sued and held liable for injury caused to individuals exposed to or taking its product candidates; and ● the Company’s reputation may suffer.
If neflamapimod, or any other product candidates we may develop or acquire, receives marketing approval and we or others identify undesirable side effects caused by such product candidates (or any other similar products) after such approval, a number of potentially significant negative consequences could result, including: ● regulatory authorities may withdraw or limit their approval of such product candidates; ● regulatory authorities may require the addition of labeling statements, such as a “Boxed” Warning or a contraindication; ● we may be required to change the way such product candidates are distributed or administered, conduct additional clinical trials or change the labeling of the product candidates; ● the FDA may require a REMS plan to mitigate risks, which could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools, and regulatory authorities in other jurisdictions may require comparable risk mitigation plans; ● we may be subject to regulatory investigations and government enforcement actions; ● the FDA or a comparable foreign regulatory authority may require us to conduct additional clinical trials or costly post-marketing testing and surveillance to monitor the safety and efficacy of the product; ● we may decide to recall such product candidates from the marketplace after they are approved; ● we could be sued and held liable for injury caused to individuals exposed to or taking its product candidates; and ● our reputation may suffer.
In cases where data from non-U.S. clinical trials are intended to serve as the basis for marketing approval in the U.S. and the trial is not conducted under the IND, the FDA will generally not accept such foreign trial data unless: (i) the data are determined to be applicable to the U.S. population and U.S. medical practice; (ii) the trials were performed by clinical investigators of recognized competence and pursuant to GCP regulations; and (iii) the FDA is able to validate the data through an onsite inspection, if necessary.
In cases where data from non-US clinical trials are intended to serve as the basis for marketing approval in the US and the trial is not conducted under the IND, the FDA will generally not accept such foreign trial data unless: (i) the data are determined to be applicable to the US population and US medical practice; (ii) the trials were performed by clinical investigators of recognized competence and pursuant to GCP regulations; and (iii) the FDA is able to validate the data through an onsite inspection, if necessary.
There is also no assurance these third parties will not make errors in the design, management or retention of the Company’s data or data systems. Any failures by such third parties could lead to a loss of data, which in turn could lead to delays in clinical development and obtaining regulatory approval.
There is also no assurance these third parties will not make errors in the design, management or retention of our data or data systems. Any failures by such third parties could lead to a loss of data, which in turn could lead to delays in clinical development and obtaining regulatory approval.
Some of the factors that may cause the market price of the Company’s common stock to fluctuate include among others: ● the ability of the Company or its partners to develop product candidates and conduct clinical trials that demonstrate such product candidates are safe and effective; ● the ability of the Company or its partners to obtain regulatory approvals for product candidates, and delays or failures to obtain such approvals; ● failure of any of the Company’s product candidates to demonstrate safety and efficacy, receive regulatory approval and achieve commercial success; ● failure by the Company to maintain its existing third-party license, manufacturing and supply agreements; ● failure by the Company or its licensors to prosecute, maintain, or enforce its intellectual property rights; ● changes in laws or regulations applicable to the Company’s product candidates; ● any inability to obtain adequate supply of product candidates or the inability to do so at acceptable prices; ● adverse regulatory authority decisions; ● introduction of new or competing products by the Company’s competitors; ● failure to meet or exceed financial and development projections the Company may provide to the public; ● the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community; ● announcements of significant acquisitions, strategic partnerships, joint ventures, or capital commitments by the Company or its competitors; 67 ● disputes or other developments relating to proprietary rights, including patents, litigation matters, and the Company’s ability to obtain intellectual property protection for its technologies; ● additions or departures of key personnel; ● significant lawsuits, including intellectual property or stockholder litigation; ● if securities or industry analysts do not publish research or reports about the Company, or if they issue an adverse or misleading opinions regarding its business and stock; ● changes in the market valuations of similar companies; ● general market or macroeconomic conditions; ● sales of its common stock by the Company or its stockholders in the future; ● the trading volume of the Company’s common stock; ● the limited percentage of the Company’s outstanding shares that are currently freely tradeable as a result of the significant holdings of the Company’s directors and officers; ● adverse publicity relating to the Company’s markets generally, including with respect to other products and potential products in such markets; ● changes in the structure of health care payment systems; and ● period-to-period fluctuations in the Company’s financial results.
Some of the factors that may cause the market price of our common stock to fluctuate include, among others: ● the ability of us or our partners to develop product candidates and conduct clinical trials that demonstrate such product candidates are safe and effective; ● the ability of us or our partners to obtain regulatory approvals for product candidates, and delays or failures to obtain such approvals; ● failure of any of our product candidates to demonstrate safety and efficacy, receive regulatory approval and achieve commercial success; ● failure by us to maintain our existing third-party license, manufacturing and supply agreements; ● failure by us or our licensors to prosecute, maintain, or enforce our intellectual property rights; ● changes in laws or regulations applicable to our product candidates; ● any inability to obtain adequate supply of product candidates or the inability to do so at acceptable prices; ● adverse regulatory authority decisions; ● introduction of new or competing products by our competitors; 64 ● failure to meet or exceed financial and development projections we may provide to the public; ● the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community; ● announcements of significant acquisitions, strategic partnerships, joint ventures, or capital commitments by us or our competitors; ● disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain intellectual property protection for our technologies; ● additions or departures of key personnel; ● significant lawsuits, including intellectual property or stockholder litigation; ● if securities or industry analysts do not publish research or reports about us, or if they issue adverse or misleading opinions regarding our business and stock; ● changes in the market valuations of similar companies; ● general market or macroeconomic conditions; ● sales of our common stock by us or our stockholders in the future; ● the trading volume of our common stock; ● the limited percentage of our outstanding shares that are currently freely tradeable as a result of the significant holdings of our directors and officers; ● adverse publicity relating to our markets generally, including with respect to other products and potential products in such markets; ● changes in the structure of health care payment systems; and ● period-to-period fluctuations in our financial results.
If neflamapimod does not receive regulatory approval or is not successfully commercialized, the Company’s business will be materially harmed. ● The development and commercialization of drug products is subject to extensive regulation, and the regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming, and inherently unpredictable.
If neflamapimod does not receive regulatory approval or is not successfully commercialized, our business will be materially harmed. ● The development and commercialization of drug products is subject to extensive regulation, and the regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming, and inherently unpredictable.
This lengthy approval process, as well as the unpredictability of future clinical trial results, may result in the Company’s failure to obtain regulatory approval to market neflamapimod as a treatment for DLB or any other indication, which would significantly harm the Company’s business, results of operations, and prospects.
This lengthy approval process, as well as the unpredictability of future clinical trial results, may result in our failure to obtain regulatory approval to market neflamapimod as a treatment for DLB or any other indication, which would significantly harm our business, results of operations, and prospects.
Preliminary and interim data are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Preliminary or interim data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data the Company previously published.
Preliminary and interim data are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Preliminary or interim data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published.
Moreover, clinical data are often susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain approval from the FDA, the EMA or other regulatory agencies for their products.
Moreover, clinical data are often susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in nonclinical studies and clinical trials have nonetheless failed to obtain approval from the FDA, the EMA or other regulatory agencies for their products.
Accordingly, there is currently no composition matter patent protection that covers neflamapimod. Rather, the Company’s patents provide protection around either the use of neflamapimod for specific or medical indication (so called “use patents”) or the administration of neflamapimod in specific manner (e.g., at a specific dose or in a specific formulation).
Accordingly, there is currently no composition matter patent protection that covers neflamapimod. Rather, our patents provide protection around either the use of neflamapimod for specific or medical indication (so called “use patents”) or the administration of neflamapimod in specific manner (e.g., at a specific dose or in a specific formulation).
In addition, in an infringement proceeding or a declaratory judgment action, a court may decide that one or more of the Company’s patents is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that the Company’s patents do not cover the technology in question.
In addition, in an infringement proceeding or a declaratory judgment action, a court may decide that one or more of our patents is not valid or is unenforceable or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question.
In DLB, in particular, prevalence estimates among experts and practitioners vary greatly, as do estimates of the percentage of DLB patients that have AD co-pathology. Additionally, the potentially addressable patient population for the Company’s product candidates may not ultimately be amenable to treatment with the Company’s product candidates.
In DLB, in particular, prevalence estimates among experts and practitioners vary greatly, as do estimates of the percentage of DLB patients that have AD co-pathology. Additionally, the potentially addressable patient population for our product candidates may not ultimately be amenable to treatment with our product candidates.
The existence of differing comprehensive privacy laws in different states in the country may make the Company’s compliance obligations more complex and costly and may require us to modify the Company’s data processing practices and policies and to incur substantial costs and potential liability in an effort to comply with such legislation.
The existence of differing comprehensive privacy laws in different states in the country may make our compliance obligations more complex and costly and may require us to modify our data processing practices and policies and to incur substantial costs and potential liability in an effort to comply with such legislation.
Fast t rack designation is granted by FDA, in response to a sponsor’s request, upon a determination that the product candidate is intended to treat a serious or life-threatening disease or condition and has the potential to address an unmet medical need, meaning it could provide a therapeutic option for patients where none exists or a therapy that may be potentially superior to existing therapy based on efficacy or safety factors.
Fast track designation is granted by FDA, in response to a sponsor’s request, upon a determination that the product candidate is intended to treat a serious or life-threatening disease or condition and has the potential to address an unmet medical need, meaning it could provide a therapeutic option for patients where none exists or a therapy that may be potentially superior to existing therapy based on efficacy or safety factors.
Moreover, because the Company is incorporated in Delaware, it is governed by the provisions of Section 203 of the DGCL, which generally prohibits a person who, together with their affiliates and associates, owns 15% or more of a company’s outstanding voting stock from, among other things, merging or combining with the company for a period of three years after the date of the transaction in which the person acquired ownership of 15% or more of the company’s outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the DGCL, which generally prohibits a person who, together with their affiliates and associates, owns 15% or more of a company’s outstanding voting stock from, among other things, merging or combining with the company for a period of three years after the date of the transaction in which the person acquired ownership of 15% or more of the company’s outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
The launch of a generic version of one of the Company’s products, in particular, would be likely to result in an immediate and substantial reduction in the demand for that product, which could have a material adverse effect on the Company’s business, financial condition, results of operations and prospects.
The launch of a generic version of one of our products, in particular, would be likely to result in an immediate and substantial reduction in the demand for that product, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
If neflamapimod, or any other product candidate the Company may develop or acquire in the future, receives marketing approval, it may nonetheless fail to gain sufficient market acceptance by physicians, health care professionals, patients, third-party payors and others in the medical community.
If neflamapimod, or any other product candidate we may develop or acquire in the future, receives marketing approval, it may nonetheless fail to gain sufficient market acceptance by physicians, health care professionals, patients, third-party payors and others in the medical community.
Undesirable side effects in one of the Company’s clinical trials for neflamapimod in one indication could adversely affect enrollment in clinical trials, regulatory approval and commercialization of the Company’s product candidate in other indications. These side effects may not be appropriately recognized or managed by the treating medical staff.
Undesirable side effects in one of our clinical trials for neflamapimod in one indication could adversely affect enrollment in clinical trials, regulatory approval and commercialization of our product candidate in other indications. These side effects may not be appropriately recognized or managed by the treating medical staff.
Thus, the cost of compliance with post-approval regulations may have a negative effect on the Company’s operating results and financial condition. The FDA’s policies may change and additional government regulations may be enacted that could prevent, limit or delay marketing approval of the Company’s product candidates.
Thus, the cost of compliance with post-approval regulations may have a negative effect on our operating results and financial condition. The FDA’s policies may change and additional government regulations may be enacted that could prevent, limit or delay marketing approval of our product candidates.
The loss of the services of any member of the Company’s senior management, clinical development or scientific staff, or any other key employee, may significantly delay or prevent the achievement of drug development and other business objectives and could have a material adverse effect on the Company’s business, operating results and financial condition.
The loss of the services of any member of our senior management, clinical development or scientific staff, or any other key employee, may significantly delay or prevent the achievement of drug development and other business objectives and could have a material adverse effect on our business, operating results and financial condition.
Under the terms of the Vertex Agreement, the Company must use commercially reasonable efforts during the license term to develop and obtain regulatory approval for a licensed product in specified major markets, and to promptly and effectively commercialize the licensed product once such approval is obtained.
Under the terms of the Vertex Agreement, we must use commercially reasonable efforts during the license term to develop and obtain regulatory approval for a licensed product in specified major markets, and to promptly and effectively commercialize the licensed product once such approval is obtained.
Before the FDA and other regulatory authorities in the European Union and elsewhere will approve neflamapimod (or any other drug candidate) for commercialization, the Company must demonstrate that it satisfies rigorous standards of safety and efficacy for each of its intended uses.
Before the FDA and other regulatory authorities in the European Union and elsewhere will approve neflamapimod (or any other drug candidate) for commercialization, we must demonstrate that it satisfies rigorous standards of safety and efficacy for each of its intended uses.
The results of preclinical studies and early clinical trials of a product candidate, including neflamapimod, may not be predictive of the results of later-stage clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials.
The results of nonclinical studies and early clinical trials of a product candidate, including neflamapimod, may not be predictive of the results of later-stage clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through nonclinical studies and initial clinical trials.
However, in August 2015, following a standard review of the long-term animal toxicity studies, the DNP placed a partial clinical hold on the Company’s then ongoing Phase 2a study in AD and any subsequent studies proposed under the IND.
However, in August 2015, following a standard review of the long-term animal toxicity studies, the DNP placed a partial clinical hold on our then ongoing Phase 2a study in AD and any subsequent studies proposed under the IND.
Before obtaining marketing approval from regulatory authorities for the sale of any product candidate, a company must complete nonclinical development and conduct extensive clinical trials to demonstrate the safety and efficacy of its product candidates in humans.
Before obtaining marketing approval from regulatory authorities for the sale of any product candidate, a company must complete nonclinical development and conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidates in humans.
In addition, there has never been an approval of a drug in DLB and therefore, there are no regulatory precedents for endpoints in that indication. Consequently, the FDA has a limited set of products to rely upon in evaluating neflamapimod.
To date, there has never been an approval of a drug in DLB and therefore, there are no regulatory precedents for endpoints in that indication. Consequently, the FDA has a limited set of products to rely upon in evaluating neflamapimod.
Additionally, the Company may not receive an extension if the Company fail to exercise due diligence during the testing phase or regulatory review process, apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements.
Additionally, we may not receive an extension if we fail to exercise due diligence during the testing phase or regulatory review process, apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements.
Additionally, in many other countries, the health care providers who prescribe pharmaceuticals are employed by their government, and the purchasers of pharmaceuticals are government entities; therefore, any Company dealings with these prescribers and purchasers are subject to regulation under the FCPA.
Additionally, in many other countries, the health care providers who prescribe pharmaceuticals are employed by their government, and the purchasers of pharmaceuticals are government entities; therefore, any of our dealings with these prescribers and purchasers are subject to regulation under the FCPA.
We cannot be sure whether additional legislative changes or executive orders will be enacted, or whether any of the FDA’s regulations, guidances or interpretations will be changed, or what the impact of such changes on the agency and its scientific review staff, if any, may be.
We cannot be sure whether additional legislative changes or executive orders will be enacted, or whether any of the FDA’s regulations, guidance or interpretations will be changed, or what the impact of such changes on the agency and its scientific review staff, if any, may be.
The Company may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of neflamapimod or any other product candidates the Company may develop or acquire. The risk of failure in drug development is high.
We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of neflamapimod or any other product candidates we may develop or acquire. The risk of failure in drug development is high.
As a result, preliminary and interim data are not necessarily predictive of final results and should be viewed with caution until the final data are available. Adverse differences between preliminary or interim data and final data could significantly harm the Company’s business prospects.
As a result, preliminary and interim data are not necessarily predictive of final results and should be viewed with caution until the final data are available. Adverse differences between preliminary or interim data and final data could significantly harm our business prospects.
There is currently no composition of matter patent protection that covers neflamapimod. EIP acquired an exclusive license from Vertex in 2014 to develop and commercialize neflamapimod for the treatment of AD and other CNS disorders.
There is currently no composition of matter patent protection that covers neflamapimod. We acquired an exclusive license from Vertex in 2014 to develop and commercialize neflamapimod for the treatment of AD and other CNS disorders.
Additionally, in December 2017, the TCJA was signed into law, which significantly reformed the Code. The TCJA included significant changes to corporate and individual taxation, some of which could adversely impact an investment in the Company’s common stock.
Additionally, in December 2017, the TCJA was signed into law, which significantly reformed the Code. The TCJA included significant changes to corporate and individual taxation, some of which could adversely impact an investment in our common stock.
Among other things, these provisions: ● allow the authorized number of the Company’s directors to be changed only by resolution of the Board; ● limit the manner in which stockholders can remove directors from the Board; ● establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to the Board; ● limit who may call stockholder meetings and the Company stockholders’ ability to act by written consent; ● authorize the Board to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by the Board; and ● require the approval of the holders of at least 2/3 of the votes that all the Company’s stockholders would be entitled to cast to amend or repeal specified provisions of the Company’s certificate of incorporation, as amended, or for stockholders to amend or repeal the Company’s amended and restated bylaws.
Among other things, these provisions: ● allow the authorized number of our directors to be changed only by resolution of the Board; 66 ● limit the manner in which stockholders can remove directors from the Board; ● establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to the Board; ● limit who may call stockholder meetings and our stockholder's ability to act by written consent; ● authorize the Board to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by the Board; and ● require the approval of the holders of at least 2/3 of the votes that all our stockholders would be entitled to cast to amend or repeal specified provisions of our certificate of incorporation, as amended, or for stockholders to amend or repeal our amended and restated bylaws.
The Company cannot accurately predict the impact of epidemics and pandemics would have on our operations and the ability of third parties to meet their obligations under contracts or arrangements with the Company, including uncertainties relating to the ultimate geographic spread of epidemics and pandemics, the severity of the underlying diseases, the duration of outbreaks, and the length of travel and quarantine restrictions imposed by governments of affected countries.
We cannot accurately predict the impact of epidemics and pandemics would have on our operations and the ability of third parties to meet their obligations under contracts or arrangements with us, including uncertainties relating to the ultimate geographic spread of epidemics and pandemics, the severity of the underlying diseases, the duration of outbreaks, and the length of travel and quarantine restrictions imposed by governments of affected countries.
If approved, in order to compete effectively in the commercial marketplace, drugs must be easy to administer, cost-effective and economical to manufacture on a commercial scale. The Company may not achieve any of these objectives.
If approved, in order to compete effectively in the commercial marketplace, drugs must be easy to administer, cost-effective and economical to manufacture on a commercial scale. We may not achieve any of these objectives.
Concerns over bank failures and bailouts and their potential broader effects and potential systemic risk on the banking sector generally and on the biotechnology industry and its participants may adversely affect the Company’s access to capital and its business and operations more generally.
Concerns over bank failures and bailouts and their potential broader effects and potential systemic risk on the banking sector generally and on the biotechnology industry and its participants may adversely affect our access to capital and our business and operations more generally.
The timely completion of clinical trials in accordance with their protocols depends on, among other things, the Company’s ability to enroll a sufficient number of research participants who remain in the study until its conclusion.
The timely completion of clinical trials in accordance with their protocols depends on, among other things, our ability to enroll a sufficient number of research participants who remain in the study until its conclusion.
It is unclear how, if at all, this presidential directive may affect the pharmaceutical industry as a whole or our business in particular. The Company ’ s employees, independent contractors, consultants, vendors and future commercial partners, if any, may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
It is unclear how, if at all, this presidential directive may affect the pharmaceutical industry as a whole or our business in particular. Our employees, independent contractors, consultants, vendors and future commercial partners, if any, may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
The Company may be subject to third-party claims including infringement, interference or derivation proceedings, reexamination proceedings, post-grant review and inter partes review before the USPTO or similar adversarial proceedings or litigation in other jurisdictions.
We may be subject to third-party claims including infringement, interference or derivation proceedings, reexamination proceedings, post-grant review and inter partes review before the USPTO or similar adversarial proceedings or litigation in other jurisdictions.
In addition, the U.S. government has the right, under certain limited circumstances, to require the Company to grant exclusive, partially exclusive, or non-exclusive licenses to any of these inventions to a third party if it determines that: (1) adequate steps have not been taken to commercialize the invention; (2) government action is necessary to meet public health or safety needs; or (3) government action is necessary to meet requirements for public use under federal regulations (also referred to as “march-in rights”).
In addition, the US government has the right, under certain limited circumstances, to require us to grant exclusive, partially exclusive, or non-exclusive licenses to any of these inventions to a third party if it determines that: (1) adequate steps have not been taken to commercialize the invention; (2) government action is necessary to meet public health or safety needs; or (3) government action is necessary to meet requirements for public use under federal regulations (also referred to as “march-in rights”).
Activities subject to these laws also involve the improper use of information obtained in the course of subject recruitment for clinical trials, which could result in regulatory sanctions and cause serious harm to the Company’s reputation.
Activities subject to these laws also involve the improper use of information obtained in the course of subject recruitment for clinical trials, which could result in regulatory sanctions and cause serious harm to our reputation.
In addition, EIP has filed patents related to formulations of neflamapimod, including pharmaceutical compositions for oral administration exhibiting desirable PK and processes for the manufacture thereof. In the U.S., the natural expiration of a patent is generally 20 years after it is filed. Although various extensions may be available, the life of a patent is limited.
In addition, EIP has filed patents related to formulations of neflamapimod, including pharmaceutical compositions for oral administration exhibiting desirable PK and processes for the manufacture thereof. In the US, the natural expiration of a patent is generally 20 years after it is filed. Although various extensions may be available, the life of a patent is limited.
Alternatively, regulatory authorities may not approve the product candidate or, as a condition of approval, may require specific warnings and contraindications or place certain limitations on how the Company can promote the drug.
Alternatively, regulatory authorities may not approve the product candidate or, as a condition of approval, may require specific warnings and contraindications or place certain limitations on how we can promote the drug.
A failure of any of the Company’s current or future CMOs to establish and follow adequate procedures to ensure compliance with applicable cGMP requirements and to document their adherence to such practices may lead to significant delays in obtaining regulatory approval of product candidates or the ultimate launch of products based on the Company’s product candidates into the market.
The failure of any of our current or future CMOs to establish and follow adequate procedures to ensure compliance with applicable cGMP requirements and to document their adherence to such practices may lead to significant delays in obtaining regulatory approval of product candidates or the ultimate launch of products based on our product candidates into the market.
Supreme Court held unanimously that federal law does not preempt the states’ ability to regulate PBMs and other members of the health care and pharmaceutical supply chain, an important decision that may lead to appears to be leading to further and more aggressive efforts by states in this area.
In December 2020, the US Supreme Court held unanimously that federal law does not preempt the states’ ability to regulate PBMs and other members of the health care and pharmaceutical supply chain, an important decision that may lead to appears to be leading to further and more aggressive efforts by states in this area.
For example, in August 2014, Paul Feller, the former Chief Executive Officer of the Company’s legal predecessor, filed a complaint asserting various causes of action related to his past affiliations with the Company’s legal predecessor.
For example, in August 2014, Paul Feller, the former Chief Executive Officer of our legal predecessor, filed a complaint asserting various causes of action related to his past affiliations with our legal predecessor.
There is no certainty that all the Company’s employees, agents, contractors, or collaborators, or those of the Company’s affiliates, will comply with all applicable laws and regulations, particularly given the high level of complexity of these laws.
There is no certainty that all our employees, agents, contractors, or collaborators, or those of our affiliates, will comply with all applicable laws and regulations, particularly given the high level of complexity of these laws.
Any such loss or lack of access to these funds could adversely impact the Company’s short-term liquidity and ability to meet its obligations. For example, on March 10, 2023, Silicon Valley Bank, and on March 12, 2023, Signature Bank, were closed by state regulators and the FDIC was appointed receiver for each bank.
Any such loss or lack of access to these funds could adversely impact our short-term liquidity and ability to meet our obligations. For example, on March 10, 2023, Silicon Valley Bank, and on March 12, 2023, Signature Bank, were closed by state regulators and the FDIC was appointed receiver for each bank.
Among others, restrictions under applicable domestic and foreign healthcare laws and regulations include: ● the U.S. federal AKS, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid; ● U.S. federal false claims, false statements and civil monetary penalties laws, including the FCA, which impose criminal and civil penalties against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; ● HIPAA, which imposes (i) criminal and civil liability for executing a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services and (ii) obligations on certain covered entity healthcare providers, health plans, and healthcare clearinghouses as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; ● analogous state and foreign laws and regulations relating to healthcare fraud and abuse, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; ● the U.S. federal “Physician Payments Sunshine Act”, which requires manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report to CMS information related to physician payments and other transfers of value to physicians, certain advanced non-physician health care practitioners, and teaching hospitals, as well as the ownership and investment interests of physicians and their immediate family members; ● analogous state and foreign laws that require pharmaceutical companies to track, report and disclose to the government or the public information related to payments, gifts, and other transfers of value or remuneration to physicians and other healthcare providers, marketing activities or expenditures, or product pricing or transparency information, or that require pharmaceutical companies to implement compliance programs that meet certain standards or to restrict or limit interactions between pharmaceutical manufacturers and members of the healthcare industry; ● U.S. federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under federal healthcare programs; and ● state and foreign laws that govern the privacy and security of health information in certain circumstances, including state security breach notification laws, state health information privacy laws and federal and state consumer protection laws, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. 62 Ensuring business arrangements comply with applicable healthcare laws, as well as responding to possible investigations by government authorities, can be time- and resource-consuming and can divert a company’s attention from the business.
Among others, restrictions under applicable domestic and foreign healthcare laws and regulations include: ● the US federal AKS, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid; ● US federal false claims, false statements and civil monetary penalties laws, including the FCA, which impose criminal and civil penalties against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; ● HIPAA, which imposes (i) criminal and civil liability for executing a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services and (ii) obligations on certain covered entity healthcare providers, health plans, and healthcare clearinghouses as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; 59 ● analogous state and foreign laws and regulations relating to healthcare fraud and abuse, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; ● the US federal “Physician Payments Sunshine Act”, which requires manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report to CMS information related to physician payments and other transfers of value to physicians, certain advanced non-physician health care practitioners, and teaching hospitals, as well as the ownership and investment interests of physicians and their immediate family members; ● analogous state and foreign laws that require pharmaceutical companies to track, report and disclose to the government or the public information related to payments, gifts, and other transfers of value or remuneration to physicians and other healthcare providers, marketing activities or expenditures, or product pricing or transparency information, or that require pharmaceutical companies to implement compliance programs that meet certain standards or to restrict or limit interactions between pharmaceutical manufacturers and members of the healthcare industry; ● US federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under federal healthcare programs; and ● state and foreign laws that govern the privacy and security of health information in certain circumstances, including state security breach notification laws, state health information privacy laws and federal and state consumer protection laws, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Any significant problem that the Company’s suppliers, manufacturers, distributors or regulatory service providers experience could delay or interrupt supply of materials necessary to produce the Company’s product candidates. Failure to obtain the needed quantities of the Company’s product candidates could have a material and adverse effect on its business, financial condition, results of operations and prospects.
Any significant problem that our suppliers, manufacturers, distributors or regulatory service providers experience could delay or interrupt supply of materials necessary to produce our product candidates. Failure to obtain the needed quantities of our product candidates could have a material and adverse effect on our business, financial condition, results of operations and prospects.
Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in U.S. federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in US federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
Significant additional clinical testing and research will be required before it can file an NDA or any other application seeking approval of neflamapimod for the treatment of DLB, or any other indication.
Significant additional clinical testing and research will be required before we can file an NDA or any other application seeking approval of neflamapimod for the treatment of DLB, or any other indication.
Many compounds that have initially showed promise in clinical or earlier stage testing are later found to cause undesirable or unexpected side effects that prevented further development of the compound.
Many compounds that have initially shown promise in clinical or earlier stage testing are later found to cause undesirable or unexpected side effects that prevented further development of the compound.
With respect to the validity of patents, for example, the Company cannot be certain that there is no invalidating prior art of which the Company and the patent examiner were unaware during prosecution.
With respect to the validity of patents, for example, we cannot be certain that there is no invalidating prior art of which we and the patent examiner were unaware during prosecution.
If the Company or a regulatory authority discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, production problems or issues with the facility where the product is manufactured or processed, such as product contamination or significant not-compliance with applicable cGMPs, a regulator may impose restrictions on that product, the manufacturing facility or the Company.
If we or a regulatory authority discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, production problems or issues with the facility where the product is manufactured or processed, such as product contamination or significant not-compliance with applicable cGMPs, a regulator may impose restrictions on that product, the manufacturing facility or us.
Furthermore, the terms of future financing transactions may contain provisions that restrict our operations or require us to relinquish certain rights to our product candidates or other technologies. The Company will likely need to raise additional funds in the future to continue its operations, fund research and development, and, if approved, commercialize its product candidates.
Furthermore, the terms of future financing transactions may contain provisions that restrict our operations or require us to relinquish certain rights to our product candidates or other technologies. We will likely need to raise additional funds in the future to continue our operations, fund research and development, and, if approved, commercialize our product candidates.
If these third parties do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to the Company’s clinical protocols or regulatory requirements or for any other reason, the Company’s clinical trials may be extended, delayed or terminated, and it may not be able to obtain regulatory approval for, or successfully commercialize any product candidate that it develops.
If these third parties do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for any other reason, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize any product candidate that we develops.
The Company’s certificate of incorporation provides that, unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware does not have jurisdiction, the federal district court for the District of Delaware) will be the sole and exclusive forum for certain proceedings, including: (1) any derivative action or proceeding brought on the Company’s behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of the Company’s directors, officers, employees or stockholders to the company or its stockholders, (3) any action asserting a claim arising pursuant to any provision of the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (4) any action asserting a claim arising pursuant to any provision of the Company’s certificate of incorporation or amended and restated bylaws (in each case, as they may be amended from time to time) or governed by the internal affairs doctrine.
Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware does not have jurisdiction, the federal district court for the District of Delaware) will be the sole and exclusive forum for certain proceedings, including: (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or stockholders to the Company or our stockholders, (3) any action asserting a claim arising pursuant to any provision of the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (4) any action asserting a claim arising pursuant to any provision of our certificate of incorporation or amended and restated bylaws (in each case, as they may be amended from time to time) or governed by the internal affairs doctrine.
The Company may raise additional capital in the future through a variety of sources, including public or private equity offerings, debt financings, grant funding, or strategic collaborations and licensing arrangements. However, adequate additional financing may not be available to the Company on acceptable terms, or at all.
We may raise additional capital in the future through a variety of sources, including public or private equity offerings, debt financings, grant funding, or strategic collaborations and licensing arrangements. However, adequate additional financing may not be available to us on acceptable terms, or at all.
In order to be successful, the Company will need to successfully manage clinical and manufacturing activities, the pursuit of regulatory approval in multiple jurisdictions, securing manufacturing supply, building a commercial organization, and significant marketing efforts, among other requirements, before it can generate any revenues from commercial sales.
In order to be successful, we will need to successfully manage clinical and manufacturing activities, the pursuit of regulatory approval in multiple jurisdictions, securing manufacturing supply, building a commercial organization, and significant marketing efforts, among other requirements, before we can generate any revenues from commercial sales.
In addition, its rationale for neflamapimod in the treatment of DLB is based on a scientific understanding of the disease that may be wrong. Drug development in the field of brain diseases, including age-related neurologic disorders and other neurodegenerative diseases in particular, has seen very limited success historically.
In addition, our rationale for neflamapimod in the treatment of DLB is based on a scientific understanding of the disease that may be wrong. Drug development in the field of brain diseases, including age-related brain disorders and other neurodegenerative diseases in particular, has seen very limited success historically.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTo provide for the availability of critical data and systems, maintain regulatory compliance, manage our material risks from cybersecurity threats, and protect against and respond to cybersecurity incidents, the activities we undertake include the following: ● monitor emerging data protection laws and implement changes to our processes that are designed to comply with such laws, as applicable; ● through our policies, practices and contracts (as applicable), require employees, as well as third parties that provide services on our behalf, to treat confidential information and data with care; ● employ technical safeguards that are designed to protect our information systems from cybersecurity threats, which are evaluated and improved through vulnerability assessments and other evaluations on a routine basis; ● provide training for our employees regarding cybersecurity threats as a means to equip them with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes and practices; ● leverage threat intelligence available to us and our third party IT service provider to help us identify, protect, detect, respond and recover if there is an actual or potential cybersecurity incident; and ● carry information security risk insurance that provides protection against the potential losses arising from a cybersecurity incident.
Biggest changeTo provide for the availability of critical data and systems, maintain regulatory compliance, manage our material risks from cybersecurity threats, and protect against and respond to cybersecurity incidents, the activities we undertake include the following: ● monitor emerging data protection laws and implement changes to our processes that are designed to comply with such laws, including industry-specific laws such as HIPAA, as applicable; ● through our policies, practices and contracts (as applicable), employees, as well as third parties that provide services on our behalf, to treat confidential information and data with care; ● employ technical safeguards that are designed to protect our information systems from cybersecurity threats, which are evaluated and improved through vulnerability assessments and other evaluations on a routine basis; ● provide training for our employees regarding cybersecurity threats as a means to equip them with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes and practices; ● leverage threat intelligence available to us and our third-party IT service provider to help us identify, protect, detect, respond and recover if there is an actual or potential cybersecurity incident; and ● carry information security risk insurance that provides protection against the potential losses arising from a cybersecurity incident.
Accordingly, our cybersecurity program is designed to identify, assess, manage and mitigate material risks from cybersecurity threats through a variety measures, including risk assessments, implementation of security measures, and ongoing monitoring of systems and networks.
Accordingly, our cybersecurity program is designed to identify, assess, manage and mitigate material risks from cybersecurity threats through a variety of measures, including risk assessments, implementation of security measures, and ongoing monitoring of systems and networks.
In response to an identified cybersecurity incident, a group comprised of appropriate management personnel, our third-party IT service provider and, depending on the scope and severity of the incident, additional third-party subject matters experts, will be assembled to develop and implement a response strategy to contain, control, and remediate the cybersecurity incident, including securing our affected systems and/or information, mitigating harmful effects of the incident, preventing further compromises, and communicating information to affected parties, regulatory agencies and law enforcement, as necessary.
In response to an identified cybersecurity incident, a group comprised of appropriate management personnel, our third-party IT service providers and, depending on the scope and severity of the incident, additional third-party subject matters experts, will be assembled to develop and implement a response strategy to contain, control, and remediate the cybersecurity incident, including securing our affected systems and/or information, mitigating harmful effects of the incident, preventing further compromises, and communicating information to affected parties, regulatory agencies and law enforcement, as necessary.
The Audit Committee meets regularly throughout the year and, on no less than a quarterly basis, receives and reviews a report from management, including the Company’s Chief Financial Officer and General Counsel, regarding the Company’s IT, cybersecurity, data security, and physical security risk, including any suspected material or immaterial cybersecurity incidents during the preceding quarter, if any, and discusses such matters with appropriate management and other personnel.
The Audit Committee meets regularly throughout the year and, on no less than a quarterly basis, receives and reviews a report from management, including our Chief Financial Officer and General Counsel, regarding our IT, cybersecurity, data security, and physical security risk, including any suspected material or immaterial cybersecurity incidents during the preceding quarter, if any, and discusses such matters with appropriate management and other personnel.
Board Oversight of Cybersecurity Risk Management and Governance Our Board is responsible for general oversight of our risk environment and associated management policies and practices and has delegated to its Audit Committee the responsibility for oversight of certain major risk categories and exposures, including with respect to cybersecurity and management’s processes to monitor and control them.
Board Oversight of Cybersecurity Risk Management and Governance Our Board is responsible for general oversight of our risk environment and associated management policies and practices and has delegated to our Audit Committee the responsibility for oversight of certain major risk categories and exposures, including with respect to cybersecurity and management processes to monitor and control them.
In addition, on a semi-annual basis, the Audit Committee receives a report from the Company’s primary third-party IT and cybersecurity regarding the Company’s IT environment, overall cybersecurity risk management program and strategy and education regarding emerging trends and threats. 79 Management's Role in Cybersecurity Risk Management and Governance Our executive management team is responsible for assessing and managing material risks from cybersecurity threats and possess relevant experience and expertise in various disciplines that are key to effectively managing such risks.
In addition, on a semi-annual basis, the Audit Committee receives a report from our primary third-party IT and cybersecurity provider regarding our IT environment, overall cybersecurity risk management program and strategy and education regarding emerging trends and threats. 76 Management's Role in Cybersecurity Risk Management and Governance Our executive management team is responsible for assessing and managing material risks from cybersecurity threats and possess relevant experience and expertise in various disciplines that are key to effectively managing such risks.
Assessment of Cybersecurity Risk The potential impact of risks from cybersecurity threats are assessed on an ongoing basis by both management and the Board, including how such risks could materially affect our business strategy, operational results, and financial condition, and from time-to-time the Company engages third-parties to provide independent risk assessments.
Assessment of Cybersecurity Risk The potential impact of risks from cybersecurity threats are assessed on an ongoing basis by both management and the Board, including how such risks could materially affect our business strategy, operational results, and financial condition, and from time-to-time we engage third-parties to provide independent risk assessments.
Risk Factors – General Risks Related to the Company ’ s Business and Operations , which disclosures are incorporated by reference herein.
Risk Factors – General Risks Related to Our Business and Operations , which disclosures are incorporated by reference herein.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeRent expense related to the Company’s short-term agreements was approximately $34,692 and $34,000 for the years ended December 31, 2024, and 2023, respectively. We believe the space is adequate to meet our near-term needs.
Biggest changeRent expense related to our short-term agreements was approximately $57,112 and $34,692 for the years ended December 31, 2025 and 2024, respectively. We believe the space is adequate to meet our near-term needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS The information in Note 10, Commitments and Contingencies — Legal Proceedings to our consolidated financial statements included in, Part II — Item 8 — Financial Statements and Supplementary Data of this Annual Report is incorporated herein by reference.
Biggest changeITEM 3. LEGAL PROCEEDINGS The information in Note 8, Commitments and Contingencies — Legal Proceedings to our consolidated financial statements included in, Part II — Item 8 — Financial Statements and Supplementary Data of this Annual Report is incorporated herein by reference.
In the opinion of management, as of the date hereof, the amount of liability, if any, with respect to these matters, individually or in the aggregate, will not materially affect our consolidated results of operations, financial position or cash flows. 80 ITEM 4. MINE SAFETY DISCLOSURES None. PART II
In the opinion of management, as of the date hereof, the amount of liability, if any, with respect to these matters, individually or in the aggregate, will not materially affect our consolidated results of operations, financial position or cash flows. 77 ITEM 4. MINE SAFETY DISCLOSURES None. PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4: Mine Safety Disclosures 81 Part II Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 81 Item 6: [Reserved] 81 Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations 81 Item 7A: Quantitative and Qualitative Disclosure About Market Risk 89 Item 8: Financial Statements and Supplementary Data 89 Item 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 108 Item 9A: Controls and Procedures 108 Item 9B: Other Information 109
Biggest changeItem 4: Mine Safety Disclosures 77 Part II Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 77 Item 6: [Reserved] 77 Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations 77 Item 7A: Quantitative and Qualitative Disclosure About Market Risk 85 Item 8: Financial Statements and Supplementary Data 85 Item 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 105 Item 9A: Controls and Procedures 106 Item 9B: Other Information 107

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades publicly on the Nasdaq Capital Market under the symbol “CRVO.” Holders As of March 14, 2025, there were 107 record holders of our common stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades publicly on the Nasdaq Capital Market under the symbol “CRVO.” Holders As of March 11, 2026, there were 102 record holders of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table summarizes our results of operations: Year Ended December 31, 2024 2023 $ Change % Change Grant revenue $ 9,737,974 $ 7,144,872 $ 2,593,102 36 % Operating expenses: Research and development 18,798,343 8,438,499 10,359,844 123 % General and administrative 9,166,762 6,519,268 2,647,494 41 % Total operating expenses 27,965,105 14,957,767 13,007,338 87 % Loss from operations (18,227,131 ) (7,812,895 ) (10,414,236 ) 133 % Other income (expense): Other income (expense) (991 ) 5,421,592 (5,422,583 ) (100 )% Interest income 1,937,427 219,430 1,717,997 (a) Total other income 1,936,436 5,641,022 (3,704,586 ) (66 )% Net loss $ (16,290,695 ) $ (2,171,873 ) $ (14,118,822 ) 650 % *(a) Not meaningful Grant Revenue Grant revenue was $9.7 and $7.1 million for the years ended December 31, 2024 and 2023, respectively.
Biggest changeInterest Income Interest income consists of interest earned on our marketable securities and on our cash and cash equivalent balances held with financial institutions. 80 Results of Operations Comparison of the Years Ended December 31, 2025 and 2024 The following table summarizes our results of operations: Year Ended December 31, 2025 2024 $ Change % Change Grant revenue $ 4,006,510 $ 9,737,974 $ (5,731,464 ) (59 )% Operating expenses: Research and development 21,817,072 18,798,343 3,018,729 16 % General and administrative 10,484,315 9,166,762 1,317,553 14 % Total operating expenses 32,301,387 27,965,105 4,336,282 16 % Loss from operations (28,294,877 ) (18,227,131 ) (10,067,746 ) 55 % Other income (expense): Other expense (8,327 ) (991 ) (7,336 ) (a) Interest income 1,336,837 1,937,427 (600,590 ) (31 )% Total other income 1,328,510 1,936,436 (607,926 ) (31 )% Net loss $ (26,966,367 ) $ (16,290,695 ) $ (10,675,672 ) 66 % *(a) Not meaningful Grant Revenue Grant revenue was $4.0 million and $9.7 million for the years ended December 31, 2025 and 2024, respectively.
We believe that inhibiting p38α activity in the brain, by interfering with key pathogenic drivers of disease, has the potential to reverse the clinical progression observed in the early-stages of certain neurodegenerative diseases, as well as slow further progression by delaying permanent synaptic dysfunction and neuron death.
We believe that inhibiting p38α activity in the brain has the potential to reverse the clinical progression observed in the early-stages of certain neurodegenerative diseases, as well as slow further progression by delaying permanent synaptic dysfunction and neuron death, by interfering with key pathogenic drivers of disease.
On April 1, 2024, pursuant to and in accordance with the terms of a securities purchase agreement with certain purchasers named therein, we completed the private placement of an aggregate of 2,532,285 units, each comprised of (i) (A) one share of common stock or (B) one Pre-Funded Warrant and (ii) one Series A Warrant.
On April 1, 2024, pursuant to and in accordance with the terms of a securities purchase agreement with certain purchasers named therein, we completed the 2024 Private Placement of an aggregate of 2,532,285 units, each comprised of (i) (A) one share of common stock or (B) one Pre-Funded Warrant and (ii) one Series A Warrant.
Financing Activities For the year ended December 31, 2024, net cash provided by financing activities was $46.4 million due to proceeds from the sale of common stock and the Pre-Funded Warrants for gross proceeds of approximately $50.0 million, partially offset by the payment of issuance costs related to the sale of common stock and the Pre-Funded Warrants of $3.6 million, in each case, in connection with the 2024 Private Placement.
For the year ended December 31, 2024, net cash provided by financing activities was $46.4 million due to proceeds from the sale of common stock and the Pre-Funded Warrants for gross proceeds of approximately $50.0 million, partially offset by the payment of issuance costs related to the sale of common stock and the Pre-Funded Warrants of $3.6 million, in each case, in connection with the 2024 Private Placement.
Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development. If we underestimate or overestimate the level of services performed or the costs of these services, actual expenses could differ from estimates.
Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the consolidated financial statements as prepaid or accrued research and development. If we underestimate or overestimate the level of services performed or the costs of these services, actual expenses could differ from estimates.
Expected Dividend Rate . The expected dividend is zero as we have not paid, nor do we anticipate paying, any dividends on our stock options in the foreseeable future.
The expected dividend is zero as we have not paid, nor do we anticipate paying, any dividends on our stock options in the foreseeable future.
Recently Issued Accounting Pronouncements The information in Note 3, Basis of Presentation and Summary of Significant Accounting Policies to our consolidated financial statements set forth in, “ Part II — Item 8 — Financial Statements ” of this Annual Report is incorporated herein by reference. 88
Recently Issued Accounting Pronouncements The information in Note 3, Basis of Presentation and Summary of Significant Accounting Policies to our consolidated financial statements set forth in, “ Part II — Item 8 — Financial Statements ” of this Annual Report is incorporated herein by reference. 85
As a result, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these arrangements. Critical Accounting Polices and Estimates Management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP.
As a result, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these arrangements. Critical Accounting Polices and Estimates Management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with US GAAP.
Estimates are based on the services performed pursuant to contracts with research institutions, CROs in connection with clinical studies, investigative sites in connection with clinical studies, vendors in connection with preclinical development activities, and CMOs in connection with the production of materials for clinical trials.
Estimates are based on the services performed pursuant to contracts with research institutions, CROs in connection with clinical studies, investigative sites in connection with clinical studies, vendors in connection with nonclinical development activities, and CMOs in connection with the production of materials for clinical trials.
During the year ended December 31, 2024, $9.7 million of grant funding was recognized as revenue, of which $7.4 million had been received and the remaining $2.3 million was recorded as grant receivable.
During the year ended December 31, 2024, $9.7 million of grant funding was recognized as revenue, of which $7.5 million had been received and the remaining $2.3 million was recorded as grant receivable.
We do not expect to generate revenue from product sales until such time, if ever. Our accumulated deficit as of December 31, 2024, was $70.7 million. We have never been profitable, and we will continue to require additional capital to develop neflamapimod and fund operations for the foreseeable future. We have historically incurred net losses in each year since inception.
We do not expect to generate revenue from product sales until such time, if ever. Our accumulated deficit as of December 31, 2025, was $97.7 million. We have never been profitable, and we will continue to require additional capital to develop neflamapimod and fund operations for the foreseeable future. We have historically incurred net losses in each year since inception.
The information contained in this discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes contained elsewhere in this Annual Report, as well as the risks and uncertainties discussed under the headings, "Item 1A — Risk Factors" and “ Note Regarding Forward-Looking Statements. ” Overview We are a clinical-stage biotechnology company focused on developing treatments for age-related neurologic disorders.
The information contained in this discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes contained elsewhere in this Annual Report, as well as the risks and uncertainties discussed under the headings, "Item 1A — Risk Factors" and “ Note Regarding Forward-Looking Statements. ” Overview We are a clinical-stage biotechnology company developing treatments for age-related brain disorders.
We will continue to seek funds through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all.
We will continue to seek funds through equity offerings, debt financings, royalty arrangements, or other dilutive or non-dilutive capital sources, including potential collaborations, licenses and/or other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all.
Further, we accrue expenses related to clinical trials based on the level of subject enrollment and activity according to the related agreement. We monitor subject enrollment levels and related activity to the extent reasonably possible and make judgments and estimates in determining the accrued balance in each reporting period.
Further, we record expenses related to clinical trials based on the level of subject enrollment and activity according to the related agreement. We monitor subject enrollment levels and related activity to the extent reasonably possible and make judgments and estimates in determining the expense balance in each reporting period.
Our future capital requirements will depend on, and could increase significantly as a result of, many factors, including: ● the enrollment, progress, timing, costs and results of our clinical trials and other development activities for neflamapimod; ● the outcome, timing and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities; ● our ability to reach certain milestone events set forth in our collaboration agreements and the timing of such achievements, triggering our obligation to make applicable payments; ● the hiring of additional clinical, scientific and commercial personnel to pursue our development plans, as well the increased costs of internal and external resources as to support our operations as a public reporting company; ● the cost and timing of securing manufacturing arrangements for clinical or commercial production; ● the cost of establishing, either internally or in collaboration with others, sales, marketing and distribution capabilities to commercialize neflamapimod, if approved; ● the cost of filing, prosecuting, enforcing, and defending our patent claims and other intellectual property rights, including defending against any patent infringement actions brought by third parties against us; ● the ability to receive additional non-dilutive funding, including grants from organizations and foundations, as well as whether and when we receive the remaining 10% of anticipated year 3 funding under our previously awarded NIA Grant; ● our ability to establish strategic collaborations, licensing or other arrangements with other parties on favorable terms, if at all; and ● the extent to which we may in-license or acquire other product candidates or technologies.
Our future capital requirements will depend on, and could increase significantly as a result of, many factors, including: ● the enrollment, progress, timing, costs and results of our clinical trials and other development activities for neflamapimod; ● the outcome, timing and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities; ● our ability to reach certain milestone events set forth in our collaboration agreements and the timing of such achievements, triggering our obligation to make applicable payments; ● the hiring of additional clinical, scientific and commercial personnel to pursue our development plans, as well the increased costs of internal and external resources as to support our operations as a public reporting company; ● the cost and timing of securing manufacturing arrangements for clinical or commercial production; ● the cost of establishing, either internally or in collaboration with others, sales, marketing and distribution capabilities to commercialize neflamapimod, if approved; ● the cost of filing, prosecuting, enforcing, and defending our patent claims and other intellectual property rights, including defending against any patent infringement actions brought by third parties against us; ● the ability to receive additional non-dilutive funding, including grants from organizations and foundations; ● our ability to establish strategic collaborations, licensing or other arrangements with other parties on favorable terms, if at all; and ● the extent to which we may in-license or acquire other product candidates or technologies. 83 A change in the outcome of any of these or other variables could significantly alter the costs and timing associated with the development of neflamapimod.
Liquidity and Capital Resources Capital Requirements From the date of our inception through December 31, 2024, our operations had primarily been financed through the issuance of common stock, convertible preferred stock and convertible debt financings. As of December 31, 2024, we had approximately $38.9 million of cash and cash equivalents and marketable securities.
Liquidity and Capital Resources Capital Requirements From the date of our inception through December 31, 2025, our operations have primarily been financed through the issuance of common stock, convertible preferred stock and convertible debt financings. As of December 31, 2025, we had approximately $20.9 million of cash, cash equivalents and marketable securities.
We have not generated positive cash flows from operations and as of December 31, 2024, we had an accumulated deficit of approximately $70.7 million. In January 2023, we were awarded a $21.0 million grant from the NIA to support the RewinD-LB Trial, which is expected to be received over a three-year period.
We have not generated positive cash flows from operations and as of December 31, 2025, we had an accumulated deficit of approximately $97.7 million. In January 2023, we were awarded a $21.0 million grant from the NIA to support the RewinD-LB Trial, which was received over a three-year period.
To date, we have not experienced significant changes in our estimates of preclinical studies and clinical trial accruals. Stock-based Compensation We believe stock-based compensation is one of our critical accounting policies used in the preparation of our consolidated financial statements.
To date, we have not experienced significant changes in our estimates of nonclinical studies and clinical trial expenses. Stock-based Compensation We believe stock-based compensation is one of our more significant accounting policies used in the preparation of our consolidated financial statements.
We expect our expenses will increase in connection with our ongoing activities, as we: ● advance neflamapimod through clinical trials; ● manufacture supplies for our nonclinical studies and clinical trials; ● obtain, maintain, expand, and protect our intellectual property portfolio; ● hire additional personnel to support our operations and growth; and ● continue to operate as a public company.
We expect our expenses will increase in connection with our ongoing activities, as we: ● advance neflamapimod through clinical trials, including our planned Phase 3 trial in DLB, subject to available funding; ● manufacture supplies for our nonclinical studies and clinical trials; ● obtain, maintain, expand, and protect our intellectual property portfolio; ● hire additional personnel to support our operations and growth; and ● continue to operate as a public company.
The aggregate upfront gross proceeds from the 2024 Private Placement were approximately $50.0 million, before deducting offering fees and expenses, and additional gross proceeds of up to approximately $99.4 million may be received if the Series A Warrants are exercised in full for cash. In addition, we were previously party to the 2022 Sales Agreement with BTIG.
The aggregate upfront gross proceeds from the 2024 Private Placement were approximately $50.0 million, before deducting offering fees and expenses, and additional gross proceeds of up to approximately $99.4 million may be received if the Series A Warrants are exercised in full for cash.
The net cash outflow from operations primarily resulted from net loss of $16.3 million, accretion of discount on marketable securities of $1.2 million and changes in operating assets and liabilities of $0.4 million, partially offset by a non-cash expense of $1.4 million for stock-based compensation. For the year ended December 31, 2023, cash used in operating activities was $7.4 million.
The net cash outflow from operations primarily resulted from net loss of $16.3 million, accretion of discount on marketable securities of $1.2 million and changes in operating assets and liabilities of $0.4 million, partially offset by a non-cash expense of $1.4 million for stock-based compensation.
We also anticipate that we will incur increased expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC and those of any national securities exchange on which our securities are traded, legal, auditing, additional insurance expenses, investor relations activities, and other administrative and professional services. 83 Other Income (Expense) Other income (expense) consists of the change in fair value of the previously outstanding Convertible Notes.
We also anticipate that we will incur increased expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC and those of any national securities exchange on which our securities are traded, legal, auditing, additional insurance expenses, investor relations activities, and other administrative and professional services.
Non-refundable advance payments made by us for future research and development activities are capitalized and expensed as the related goods are delivered and as services are performed. Specific program expenses include expenses associated with the development of our lead product candidate, neflamapimod, including our ongoing Phase 2b RewinD-LB Trial in patients with DLB.
Non-refundable advance payments made by us for future research and development activities are capitalized and expensed as the related goods are delivered and as services are performed. Specific program expenses include expenses associated with the development of our lead product candidate, neflamapimod.
Investing Activities For the year ended December 31, 2024, cash used in investing activities was $28.7 million due to the purchase of marketable securities, partially offset by the maturities of marketable securities. We did not have any cash provided by or used in investing activities for the year ended December 31, 2023.
For the year ended December 31, 2024, cash used in investing activities was $28.7 million due to the purchase of marketable securities, partially offset by the maturities of marketable securities.
Based on our current operating plan, we believe our existing cash and cash equivalents and marketable securities on hand as of December 31, 2024 will enable us to fund our operating expenses and capital expenditure requirements for at least twelve months from the issuance of the consolidated financial statements included in this Annual Report. 82 Financial Operations Overview Revenue To date, we have not generated any revenue from product sales and we do not expect to do so in the near future.
Based on our current operating plan, we do not believe our existing cash, cash equivalents and marketable securities on hand as of December 31, 2025 will enable us to fund our operating expenses and capital expenditure requirements for at least twelve months from the issuance of the consolidated financial statements included in this Annual Report.
In August 2024, we received an additional $0.3 million from the NIA. As of December 31, 2024, total cash funding of $14.8 million had been received from the NIA Grant.
In August 2024, we received an additional $0.3 million from the NIA. As of December 31, 2025, total cash funding of $20.5 million had been received from the NIA Grant and approximately $0.6 million in funding is remaining.
In March 2025, the Company received access to 90% of the full amount of current year funding provided for in the NIA Grant, due to current NIA policy as a result of the U.S. government currently being funded on the basis of a continuing resolution.
In March 2025, we received access to 90% of the year 3 funding and, in June 2025, we received access to an additional 8% of the year 3 funding provided for in the NIA Grant, due to then-current NIA policy as a result of the US government currently being funded on the basis of a continuing resolution.
These companies are considered to be comparable to our business over a period equivalent to the expected term of the stock-based awards. Risk-Free Interest Rate . The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the stock options expected term.
The risk-free interest rate is based on the US Treasury yield curve in effect at the date of grant for zero-coupon US Treasury notes with maturities approximately equal to the stock options expected term. Expected Dividend Rate .
Research and Development Expenses Research and development expenses account for a significant portion of our operating expenses and primarily consist of costs incurred for the discovery and development of our product candidates, including: ● expenses incurred under agreements with CROs, preclinical testing organizations, consultants, and other third-party vendors, collaborators and service providers; ● costs related to production of clinical materials, including fees paid to CMOs; ● vendor expenses related to the execution of preclinical studies and clinical trials; ● personnel-related expenses, including salaries, benefits, and stock-based compensation for personnel engaged in research and development functions; ● costs related to the preparation of regulatory submissions; ● third-party license fees; and ● expenses for rent and other supplies.
In January 2026, we were informed that we will not receive the final 2% of year 3 grant funding that remained unavailable as of December 31, 2025, or approximately $0.1 million, as a result of agency-wide reductions in NIA funding. 79 Research and Development Expenses Research and development expenses account for a significant portion of our operating expenses and primarily consist of costs incurred for the discovery and development of our product candidates, including: ● expenses incurred under agreements with CROs, nonclinical testing organizations, consultants, and other third-party vendors, collaborators and service providers; ● costs related to production of clinical materials, including fees paid to CDMOs; ● vendor expenses related to the execution of nonclinical studies and clinical trials; ● personnel-related expenses, including salaries, benefits, and stock-based compensation for personnel engaged in research and development functions; ● costs related to the preparation of regulatory submissions; ● third-party license fees; and ● expenses for rent and other supplies.
The fair value of stock options is determined by us using the methods and assumptions discussed below. Expected Term . The expected term represents the period that stock-based awards are expected to be outstanding. We use the “simplified method” to estimate the expected term of stock option grants.
The fair value of stock options is determined by us using the methods and assumptions discussed below. Each of these inputs is subjective and generally requires judgment and estimation by management. Expected Term . The expected term represents the period that stock-based awards are expected to be outstanding.
Our net loss was $16.3 million and $2.2 million in the years ended December 31, 2024 and December 31, 2023, respectively.
Our net losses were $27.0 million and $16.3 million in the years ended December 31, 2025 and 2024, respectively.
Under this approach, the weighted-average expected life is presumed to be the average of the contractual term of ten years and the weighted-average vesting term of our stock options, taking into consideration multiple vesting tranches. We utilize this method due to lack of historical data and the plain-vanilla nature of our stock-based awards. Expected Volatility .
We use the “simplified method” to estimate the expected term of stock option grants. Under this approach, the weighted-average expected life is presumed to be the average of the contractual term of ten years and the weighted-average vesting term of our stock options, taking into consideration multiple vesting tranches.
We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. We will continue to require additional financing to advance our current product candidates through clinical development, to develop, acquire or in-license other potential product candidates and to fund operations for the foreseeable future.
We will continue to require additional financing to advance our current product candidates through clinical development, to develop, acquire or in-license other potential product candidates and to fund operations for the foreseeable future.
Left untreated, synaptic dysfunction can result in irreversible neuronal loss that leads to devastating disabilities, significant reliance on a caretaker, long term care living, and, ultimately, death. However, before neuronal loss commences, disease progression in many major neurodegenerative disorders, including DLB, initially involves a protracted period of reversible functional loss, particularly with respect to the synapses.
However, before neuronal loss commences, disease progression in many major neurodegenerative disorders, including DLB, initially involves a protracted period of reversible functional loss, particularly with respect to the synapses.
Chronic activation of the enzyme p38α in the brains of people with certain neurodegenerative diseases is believed to impair how neurons communicate through synapses. This impairment, termed synaptic dysfunction, leads to deterioration of cognitive and motor abilities.
Chronic activation of p38α in the brains of people with certain neurodegenerative diseases is believed to impair how neurons communicate through synapses. This synaptic dysfunction leads to deterioration of cognitive and motor abilities. Left untreated, synaptic dysfunction can result in irreversible neuronal loss that leads to devastating disabilities, significant reliance on a caretaker, long term care living, and, ultimately, death.
Our primary uses of capital are, and we expect will continue to be, costs related to clinical research, manufacturing and development services; compensation and related expenses; costs relating to the build-out of our headquarters, other offices and laboratories; license payments or milestone obligations that may arise; laboratory expenses and costs for related supplies; manufacturing costs; legal and other regulatory expenses and general overhead costs. 85 Based on our current operating plan, we believe our existing cash and cash equivalents and marketable securities on hand as of December 31, 2024 will enable us to fund our operating expenses and capital expenditure requirements for at least twelve months from the issuance of the consolidated financial statements included in this Annual Report.
Our primary uses of capital are, and we expect will continue to be, costs related to clinical research, manufacturing and development services; compensation and related expenses; costs relating to the build-out of our headquarters, other offices and laboratories; license payments or milestone obligations that may arise; laboratory expenses and costs for related supplies; manufacturing costs; legal and other regulatory expenses and general overhead costs.
A substantial portion of our ongoing research and development activities are conducted by third-party service providers. We record accrued expenses for estimated preclinical study and clinical trial expenses.
A substantial portion of our ongoing research and development activities are conducted by third-party service providers. We record an estimate of expense for nonclinical studies and clinical trials in the period the expense is incurred.
Research and Development Expenses Research and development expenses were $18.8 million for the year ended December 31, 2024, compared to $8.4 million for the year ended December 31, 2023.
(a) Not meaningful. Research and development expenses were $21.8 million for the year ended December 31, 2025, compared to $18.8 million for the year ended December 31, 2024. The increase of $3.0 million was due to several factors.
During the year ended December 31, 2023, $7.1 million of grant funding was recognized as revenue, of which $6.2 million had been received at year-end and the remaining $0.9 million was recorded as grant receivable.
Funding from the NIA Grant was to be received in three annual installments and recognized as grant revenue as the qualifying expenses related thereto are incurred. During the year ended December 31, 2025, $4.0 million of grant funding was recognized as revenue, of which $3.6 million had been received and the remaining $0.4 million was recorded as grant receivable.
We have limited information on the volatility of common stock as the shares were not actively traded on any public markets until recently. As such, expected volatility is derived from the historical stock volatilities of comparable peer public companies within our industry.
We utilize this method due to lack of historical data and the plain-vanilla nature of our stock-based awards. Expected Volatility . We have limited information on the volatility of common stock as the shares were not actively traded on any public markets until August 2023.
For the year ended December 31, 2023, net cash provided by financing activities was $11.1 million. The net cash provided by financing activities primarily resulted from the net assets assumed in connection with the reverse recapitalization and sale of common stock offset by the payment of offering costs.
Financing Activities For the year ended December 31, 2025, net cash provided by financing activities was $4.6 million due to proceeds from the sale of common stock for $4.6 million, net of offering costs, pursuant to the Sales Agreement.
The net cash outflow from operations primarily resulted from net loss of $2.2 million which included a $5.4 million non-cash gain due to a change in fair value of convertible debt and changes in operating assets and liabilities of $0.3 million, offset by a non-cash charge of $0.4 million for stock-based compensation.
The net cash outflow from operations primarily resulted from net loss of $27.0 million and accretion of discount on marketable securities of $0.9 million, offset by changes in operating assets and liabilities of $2.9 million and $1.4 million for stock-based compensation. For the year ended December 31, 2024, cash used in operating activities was $16.5 million.
We believe that the accounting policies discussed below are critical to understanding our historical and future performance. 87 Research and Development Costs We believe research and development costs is a critical accounting policy and critical accounting estimate as it involves significant estimates and judgments in the preparation of our consolidated financial statements.
Actual results may differ from these estimates under different assumptions or conditions, and any such differences may be material. We believe that the accounting policies discussed below are critical to understanding our historical and future performance. 84 Research and Development Costs We believe research and development costs is a critical accounting policy and estimate.
Furthermore, our operating plans may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such operating plans. 86 Cash Flows Year Ended December 31, 2024 2023 Net cash used in operating activities $ (16,530,827 ) $ (7,449,847 ) Net cash used in investing activities (28,661,129 ) — Net cash provided by financing activities 46,398,606 11,149,114 Net increase in cash and cash equivalents $ 1,206,650 $ 3,699,267 Operating Activities For the year ended December 31, 2024, cash used in operating activities was $16.5 million.
Cash Flows Year Ended December 31, 2025 2024 Net cash used in operating activities $ (23,449,963 ) $ (16,530,827 ) Net cash provided by (used in) investing activities 18,097,249 (28,661,129 ) Net cash provided by financing activities 4,588,687 46,398,606 Net (decrease) increase in cash and cash equivalents $ (764,027 ) $ 1,206,650 Operating Activities For the year ended December 31, 2025, cash used in operating activities was $23.4 million.
In January 2023, we were awarded our $21.0 million NIA Grant and, in August 2024, we were awarded an additional $0.3 million under our NIA Grant. Funding from the NIA Grant is recognized as grant revenue as the qualifying expenses related thereto are incurred.
Financial Operations Overview Revenue To date, we have not generated any revenue from product sales and we do not expect to do so in the near future. In January 2023, we were awarded our $21.0 million NIA Grant and, in August 2024, we were awarded an additional $0.3 million under our NIA Grant.
Our primary uses of cash are to fund our operations, which consist primarily of research and development expenditures related to our programs and, to a lesser extent, general and administrative expenditures.
During the year ended December 31, 2025, we sold 550,000 shares of common stock to an institutional investor in a block sale for proceeds of $4.7 million, net of $0.1 million of issuance costs. 82 Our primary uses of cash are to fund our operations, which consist primarily of research and development expenditures related to our programs and, to a lesser extent, general and administrative expenditures.
Neflamapimod is currently being evaluated in our ongoing RewinD-LB Trial, a Phase 2b study in patients with DLB funded primarily by a $21.3 million grant from the NIA. 81 Our novel approach focuses on reducing the impact of inflammation in the brain, or neuroinflammation, which we believe is a key factor in the manifestation of degenerative diseases of the brain, including DLB.
Neflamapimod is currently in clinical development for the treatment of DLB, our lead indication, as well as nfvPPA, RAS, and ALS. 78 Our novel approach focuses on reducing the impact of neuroinflammation, which we believe is a key factor in the manifestation of degenerative diseases of the brain.
The 2022 Sales Agreement was an "at-the-market" sales agreement pursuant to which we were able to, from time to time and through BTIG as our agent, sell up to an aggregate of $20.0 million in shares of common stock by any permissible method deemed an “at-the-market offering” as defined in Rule 415(a)(4) under the Securities Act.
On May 21, 2025, we entered into the Sales Agreement with Leerink Partners, LLC, as sales agent, pursuant to which we may offer and sell shares of common stock from time-to-time with an aggregate offering price of up to $50.0 million under an “at-the-market" offering program.
We believe we are a leader in the industry in developing a treatment for DLB, as neflamapimod is the only clinical drug candidate of which we are aware that has shown statistically significant improvements compared to placebo in a Phase 2a clinical trial (our AscenD-LB Trial) and improved outcomes (p Our ongoing RewinD-LB Trial is a Phase 2b study in 159 participants with DLB funded primarily by a $21.3 million grant from the NIA.
Neflamapimod is the only clinical drug candidate that, to our knowledge, has shown statistically significant improvements on clinical endpoints and a biomarker of neurodegeneration in both a Phase 2a and Phase 2b clinical trial. Differentiating our approach from potential competitors, we believe we are also the only company specifically targeting the treatment of DLB patients without AD co-pathology.
Interest Income Interest income was $1.9 million and $0.2 million for the years ended December 31, 2024 and 2023, respectively. The increase was primarily due to interest earned on our increased cash equivalents and marketable securities balances in the current year period following the completion of the 2024 Private Placement in April 2024.
Other Expense There was a de minimis amount of other expense for the years ended December 31, 2025 and 2024. Interest Income Interest income was $1.3 million and $1.9 million for the years ended December 31, 2025 and 2024, respectively. The decrease was primarily due to lower investment balances as cash was used for operations.
Removed
We are currently focused on the development of our lead drug candidate, neflamapimod, an investigational, orally administered, small molecule brain penetrant that inhibits p38α in the neurons of people with neurodegenerative diseases. We believe neflamapimod has the potential to treat synaptic dysfunction, the reversible aspect of the underlying disease processes in DLB and certain other major neurological disorders.
Added
Our lead drug candidate, neflamapimod, is an investigational, orally administered small-molecule drug that readily crosses the blood–brain barrier and selectively inhibits the enzyme p38α, a key driver of neuroinflammation and synaptic dysfunction.
Removed
Patients with AD co-pathology, as assessed by ptau181 levels at screening, were excluded from the trial. Intended to confirm the efficacy findings from the AscenD-LB Trial, we announced 16-week results from the Extension Phase of the RewinD-LB Trial in March 2025.
Added
By targeting the critical disease processes underlying degenerative disorders of the brain, neflamapimod has the potential to reverse synaptic dysfunction, improve neuron health, and slow or prevent disease progression.
Removed
In the first 16 weeks of the Extension, treatment with the New Capsules led to increased plasma drug concentrations and demonstrated improvement on the trial's primary outcome measure, change from baseline in CDR-SB (p In addition to neflamapimod’s potential to treat DLB, we believe the benefit of targeting neuroinflammation-induced synaptic dysfunction in the BFC system can be applied to other neurologic indications in which treatment of BFC dysfunction and degeneration would be expected to be clinically beneficial, including as treatment for certain forms of frontotemporal dementia, such as primary progressive aphasia, and promoting recovery after ischemic stroke.
Added
We believe we are a leader in the industry in developing a treatment for DLB, a disease with no approved therapies in the US or European Union despite being the second most common progressive dementia.
Removed
Financial Summary As of December 31, 2024, we had cash and cash equivalents and marketable securities of approximately $38.9 million.
Added
While DLB patients with AD co-pathology generally have significant, irreversible neuronal loss, DLB without AD co-pathology is primarily a disease of functional deficits of synapses that we believe is more treatable.
Removed
Interest Income Interest income consists of interest earned on our marketable securities and on our cash and cash equivalent balances held with financial institutions.
Added
We believe if neflamapimod is given in the early stages of certain degenerative diseases of the brain like DLB without AD co-pathology, it may reverse synaptic dysfunction, improve neuron health and function, and slow further progression by delaying synaptic dysfunction and neuronal death.
Removed
This increase in grant revenue — all of which, for each period presented, was received pursuant to our NIA Grant — was related to an increase in services performed during the year ended December 31, 2024, as a result of, among other things, a larger number of trial sites being active during the current year.
Added
We believe this approach enhances the alignment of our development path with neflamapimod’s mechanism of action, reduces the heterogeneity of our target patient population, and provides the opportunity to demonstrate heightened clinical effect in shorter duration trials. Financial Summary As of December 31, 2025, we had cash, cash equivalents and marketable securities of approximately $20.9 million.
Removed
We initiated the RewinD-LB Trial in the second quarter of 2023 and completed the last patient, last visit for the Initial Phase of the trial in October 2024. The Extension Phase of the trial remains ongoing and we expect to report 32-week data from the RewinD-LB Trial in the second half of 2025.
Added
The consolidated financial statements appearing elsewhere in this Annual Report have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business and do not include any adjustments that might result from the outcome of this uncertainty.
Removed
The increase of $10.4 million was primarily due an increase in outsourced CRO site expenses related to our RewinD-LB Trial services, which ramped up progressively between initiation and the completion of enrollment as described above.
Added
In each year, all grant revenue is related to the NIA Grant which funded our RewinD-LB Trial. The year-over-year decrease of $5.7 million is due to the completion of the Randomized Phase of the RewinD-LB Trial in late 2024, followed by the subsequent completion of the Extension Phase in mid-2025.
Removed
In addition, the increase was driven by the manufacturing of drug product batches to support further clinical development of neflamapimod, including our ongoing and planned trials in DLB, PPA and recovery after stroke, CRO expenses to support our stroke trial, non-clinical studies, and consulting services.
Added
Research and Development Expenses The following table summarizes our research and development expenses by functional area for the years ended December 31, 2025 and 2024: Years Ended December 31, 2025 2024 $ Change % Change Dementia with Lewy bodies $ 7,052,512 $ 12,102,842 $ (5,050,330 ) (42 )% Frontotemporal disorders (incl. nfvPPA) 1,217,784 36,853 1,180,931 (a ) Recovery after stroke 1,427,966 391,659 1,036,307 265 % Other clinical* and nonclinical 2,504,863 2,499,202 5,661 — % Personnel costs, excluding stock-based compensation 5,745,558 2,187,221 3,558,337 163 % Stock-based compensation 482,669 218,822 263,847 121 % Other research and development expenses, including CMC 3,385,720 1,361,744 2,023,976 149 % Total research and development expenses $ 21,817,072 $ 18,798,343 $ 3,018,729 16 % * Includes early-stage clinical studies that are not indication-specific and related costs.
Removed
General and Administrative Expenses General and administrative expenses were $9.1 million for the year ended December 31, 2024, compared to $6.5 million for the year ended December 31, 2023. The increase of $2.6 million was primarily due to public company related costs following the completion of the Merger, which closed in the third quarter of 2023.
Added
The increase of personnel costs of $3.6 million and increase in stock-based compensation of $0.3 million were driven by higher headcount and an increase in outsourced consulting costs.
Removed
The drivers of the increase were primarily outsourced legal costs, insurance costs, headcount costs, investor/public relations costs, and stock-based compensation expense due to additional stock options granted and an amendment to our former chief financial officer's previously granted option awards in connection with his termination as an employee in May 2024 to extend the vesting and exercise periods thereunder to September 30, 2025. 84 Other Income (Expense) There was a de minimis amount of other income (expense) for the year ended December 31, 2024, compared to $5.4 million for the year ended December 31, 2023.
Added
The increase of $2.0 million in costs related to CMC activities and other research and development expenses is primarily related to the analysis of the batch issues identified during the Randomized Phase of the RewinD-LB Trial and the implementation of our planned pre-Phase 3 manufacturing improvements.
Removed
The amount in the prior year period was due to adjustments to the fair value of the Convertible Notes. The Convertible Notes converted into the right to receive common stock in connection with the closing of the Merger in August 2023 and were not outstanding during the current year period.
Added
Finally, we saw an aggregate increase of $2.2 million related to non-DLB clinical work for neflamapimod, including costs related to our RESTORE Trial in RAS and Phase 2a trial in nfvPPA, which were both initiated during 2025.
Removed
The timing of the Company’s receipt of the remaining 10% of current year funding is dependent upon and subject to U.S. congressional approval of a final appropriations bill.
Added
These amounts were offset by a decrease of $5.1 million in DLB-related clinical spend due to the completion of the Randomized Phase of the RewinD-LB Trial in December 2024, followed by the subsequent completion of the Extension Phase in mid-2025. 81 General and Administrative Expenses The following table summarizes our general and administrative expenses by functional area for the years ended December 31, 2025 and 2024: Years Ended December 31, 2025 2024 $ Change % Change Personnel costs, excluding stock-based compensation $ 4,988,705 $ 3,995,114 $ 993,591 25 % Stock-based compensation 965,965 1,186,900 (220,935 ) (19 )% Professional fees 2,752,710 2,684,386 68,324 3 % Insurance, taxes and similar fees 1,166,374 985,481 180,893 18 % Other general and administrative expenses, including IT, facilities, supplies and similar costs 610,561 314,879 295,682 94 % Total general and administrative expenses $ 10,484,315 $ 9,166,760 $ 1,317,555 14 % General and administrative expenses were $10.5 million for the year ended December 31, 2025, compared to $9.2 million for the year ended December 31, 2024.
Removed
On October 1, 2024, pursuant to and in accordance with Section 12(b) thereof, we notified BTIG that we were terminating the 2022 Sales Agreement effective October 11, 2024.
Added
The increase of $1.3 million was primarily due to the increase of $1.0 million in personnel costs, the increase of $0.3 million in other general and administrative expenses, the increase of $0.2 million in insurance and taxes, and the increase of $0.1 million in professional fees, partially offset by a decrease of $0.2 million in stock-based compensation.
Removed
We were not subject to any termination penalties or other expenses related to the termination of the 2022 Sales Agreement and, prior to termination, no shares were sold pursuant to the 2022 Sales Agreement.
Added
The increase in personnel costs was primarily driven by headcount and additional severance costs. The decrease in stock-based compensation was primarily due to higher stock compensation expense related to stock option modifications in the prior year in comparison to current year.

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